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FTC Issues New Guidelines for Online Ads

The Federal Trade Commission has released new guidelines about e-commerce and online advertising disclosures. Small business owners will want to pay close attention.

The new guidelines take the FTC's "Dot Com Disclosures" pamphlet, originally issued in 2000, and kicks it up a notch. The revamped and renamed ".com Disclosures" guide accounts for changes in technology, including the increasing use of smartphones in the online marketplace.

The guidelines aim to push consumer awareness and protection. In general, advertisements should not be unfair and deceptive. They should also not be misleading. Advertisers must always have evidence to back up any claim they are making in the advertisement.

Examples of Proper Disclosures

If an online advertisement will mislead readers in any way, a disclosure needs to be made to set the readers straight, the FTC advises. Here are a few examples:

  • Imitation jewelry: If the picture makes it appear real, there should be a visible disclosure marking it as "imitation."
  • Time-share advertisements: If the $399-all-inclusive-vacation package is really "subject to availability" and really a ploy for marketing a time-share, this should be clearly disclosed.
  • Hidden monthly fees: Items that advertise one flat price in large print, but have a required monthly service fee in smaller print, are not making proper disclosures, according to the FTC's guidelines.

In the online world, it's easy to make a purchase at the click of a mouse. It's even easier to buy something from your smartphone without fully being aware of what you are buying.

That's why the guidelines put a huge focus on clear and conspicuous disclosure.

What's 'Clear and Conspicuous'?

The guidelines are long, and run into the dozens of pages. Luckily, we've done the sifting for you.

According to the FTC, here are some key things to think about when making "clear and conspicuous" online advertising disclosures:

  1. Don't make the print too small.
  2. Don't use hyperlinks to communicate disclosures that are an integral part of the claim.
  3. Keep the disclosure close to the advertised claim.
  4. Don't have distracting images or other details take the reader away from the disclosure.
  5. Repeat the disclosures on your website.

The FTC's new guide, entitled ".com Disclosures: How to Make Effective Disclosures in Digital Advertising," can be accessed here. For questions about how it may apply to your specific situation, it may be best to consult an experienced business attorney.

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