FTC Staff Issues Guidelines on Internet Advertising

The Federal Trade Commission today issued a staff working paper examining how its own consumer protection rules and guides -- many of which were developed long before "dot com" became a household phrase -- apply to advertising and sales on the Internet. The paper, Dot Com Disclosures: Information about Online Advertising, provides guidance to businesses about how FTC law applies to online activities with a particular focus on the clarity and conspicuousness of disclosures in Internet ads. The paper also discusses how Commission rules and guides that use certain words -- "written," "writing," "printed" and "direct mail" -- apply to new technologies.

"Dot commerce is the new Main Street," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "This guidance represents the cooperative efforts of government, communications experts in industry and consumer groups to achieve fair and informative online advertising for consumers."

The working paper advises online advertisers that the same consumer protection laws that apply to commercial activities in other media apply online and that any disclosures required to prevent an ad from being misleading must be clear and conspicuous. The paper focuses on how required disclosures may be presented clearly and conspicuously in online ads and provides key considerations for evaluating their effectiveness.

The paper discusses, in the context of online ads, the traditional factors used to evaluate whether disclosures are likely to be clear and conspicuous, including: the placement of the disclosure in an ad and its proximity to the relevant claim; the prominence of the disclosure; whether items in other parts of the ad distract attention from the disclosure; whether the ad is so lengthy that the disclosure needs to be repeated; whether disclosures in audio messages are presented in an adequate volume and cadence and visual disclosures appear for a sufficient duration; and, whether the language of the disclosure is understandable to the intended audience.

The appendix of the working paper contains mock advertisements that illustrate one or more of these particular factors. The paper notes that actual disclosures must be evaluated in the context of an advertisement as a whole.

Further, the working paper addresses specific issues in applying certain Commission rules and guides to Internet activities and the use of new technologies to comply with those rules and guides. For example, some rules and guides use certain terms -- such as "written," "writing" and "printed" -- that connote words or information on paper. Consumers expect to receive the same information and protections whether they are looking at a paper catalog or an online one. The paper explains that those rules and guides that apply to written ads or printed materials also apply to visual text displayed on the Internet. In addition, the paper discusses the circumstances in which businesses may use email to comply with a rule or guide requirement to provide or send required notices or documents to consumers.

The publication of this paper follows a public comment period and public workshop which was held to discuss the applicability of Commission rules and guides to Internet advertising. The paper does not set forth new rules for online advertising, but instead describes how existing consumer protection laws apply to the unique features of the medium.

The Commission vote approving the issuance of the staff working paper was 5-0.

Copies of the staff working paper, "Dot Com Disclosures: Information about Online Advertising," are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; toll-free: 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC Matter No. P974102)