Somewhat later than anticipated, the Federal Trade Commission (“FTC”) has published a revised version of its guide, .Com Disclosures. The FTC released the original guide 13 years ago, when mobile phones had not yet met the internet and social media barely existed. In the new version of the guide, updated recommendations and new examples focus on how to craft disclosures given the smaller screen sizes of smartphones as compared to computers and the character and space limitations of most social media (e.g., the 140-character limit for Twitter tweets).
Clear & Conspicuous Requirement. Under the FTC Act, if a disclosure is necessary to prevent a claim from being deceptive, then the disclosure must be “clear and conspicuous.” The revised guide, like the 2000 version, continues to emphasize that advertisers should consider the following factors in determining whether an online disclosure is clear and conspicuous:
- Placement of the disclosure and how proximate it is to the claim being qualified;
- Prominence of the disclosure (e.g., the size of the disclosure in a visual ad; the volume of the disclosure in an audio ad);
- Whether the disclosure is unavoidable;
- Whether other elements in the ad distract from the disclosure;
- Whether the disclosure needs to be repeated; and
- Whether the language of the disclosure is understandable.
Scrolling. The revised guide spends a considerable amount of time discussing the situation where reading a disclosure on a computer, smartphone, or other device may require scrolling. The revised guide states, “When advertisers are putting disclosures in a place where consumers might have to scroll in order to view them, they should use text or visual cues to encourage consumers to scroll and avoid formats that discourage scrolling.”
The guide provides a laundry list of what the FTC considers to be inadequate cues to scroll. The guide, for instance, recommends against using “vague statements, such as ‘details below’”; using only scroll bars on the edge of the screen to indicate that scrolling is required; and leaving large swaths of blank space above a disclosure.
The FTC, in general, recommends either “[o]ptimizing websites for mobile devices” or placing website disclosures in vertical alignment with the claim being qualified. The FTC’s rationale is that consumers “who have to zoom in to read a claim on a small screen” may be unlikely to scroll right or left in order to view a disclosure.
Hyperlinking. Regardless of where a hyperlink might appear – for instance, on an advertiser’s website or in an endorser’s social media post – the revised guide recommends considering the following factors:
- The placement and prominence of the hyperlink;
- Whether the label of the hyperlink is appropriately descriptive and “give[s] consumers a reason to click on it”;
- Whether the actual disclosure provided via hyperlink is understandable; and
- Whether hyperlinks throughout a website (or other piece of online advertising) are consistent in style and presentation.
The FTC cautions that some disclosures, such as “cost information” and “certain health information,” should not normally be provided through a hyperlink. The guide allows for some wiggle room, however, and states that if details are “too complex” to describe on the same page, a hyperlink might be appropriate if it clearly conveys the nature of the disclosure.
A new example seeks to demonstrate an appropriate hyperlinked disclosure. A one-page online ad for the “Frost-A-Tron” electric cooler includes a “Satisfaction Guaranteed” claim. Directly below that claim, there is a hyperlink labeled, “Restocking fee applies to all returns.” The hyperlink then leads to a fee schedule providing different dollar amounts that will apply depending on how soon after purchase a consumer returns the Frost-A-Tron.
Pop-Ups. Regarding pop-ups or other “high tech” interstitial methods of delivering information, the revised guides recommend considering:
- Whether the various browsers or devices that a consumer might use will support the pop-up or other method of delivery;
- Whether blocking software will prevent proper display; and
- Whether consumers might be inclined to ignore the disclosure given the particular delivery method.
The FTC suggests that advertisers might overcome the problem of consumers ignoring a disclosure if the consumer is forced to actively choose and click “yes” or “no” in order to proceed.
No Exceptions. A common theme throughout the revised guide is that if limited space or technology constraints prevent a disclosure from being clear and conspicuous, then the particular claim, advertisement, or medium should not be used. The guide states, “If a disclosure is necessary to prevent an advertisement from being deceptive, unfair, or otherwise violative of a Commission rule, and if it is not possible to make the disclosure clear and conspicuous, then either the claim [that is being qualified] should be modified so that the disclosure is not necessary or the ad should not be disseminated.”
Where space is especially limited, such as in tweets or banner ads, the FTC recommends closely considering factors such as whether a disclosure will be retained with republishing (e.g., re-tweeting) and whether abbreviated disclosures will be understood by consumers. A new example indicates that the FTC believes that “Ad” at the beginning of a tweet will usually be adequate to indicate that a message is sponsored, but that the abbreviated disclosure, “#spon,” will not.
What’s Next. Although not legally binding, the new version of .Com Disclosures represents a snap shot of how FTC Staff will likely apply the law moving forward in reviewing online disclosures and pursuing enforcement action. As it typically does after releasing new guidance, the FTC will likely seek to test its interpretations. The FTC may target low-hanging fruit or it may seek to make its point with big fish. In recent years, the FTC has actively and deliberately targeted a greater number of well-known, national brands. All advertisers under FTC jurisdiction are well-advised to review their use of online disclosures sooner rather than later.
Even though the new guide is not binding on the Food and Drug Administration (“FDA”), it is instructive to FDA-regulated entities considering the use of social media and other new media in structuring their digital advertisements.