Online Advertising: Disclose, Disclose, Disclose

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If you or your business engage in online advertising (including through websites, blogs, mobile applications, Facebook, Twitter, Instagram and Tumblr), be sure you are familiar and comply with the Federal Trade Commission (FTC) disclosure guidelines commonly known as the “.com Disclosures

The FTC is stepping up enforcement actions that require businesses make clear and conspicuous disclosures, regardless of the platform, so as not to engage in “deceptive or unfair” advertising.  A couple of months ago, the FTC entered its Decision and Order in connection with its complaint against Amerifreight, Inc. for failing to properly disclose that it had paid consumers for online reviews. The action against Amerifreight came on the heels of the FTC’s action against Legacy Learning Systems for $250,000 in damages for a violation of blogger endorsement rules.

Similarly, Lock & Taylor may have recently violated the FTC’s disclosure guidelines when the retailer gave 50 bloggers a dress from its 2015 Design Lab fashion line and paid the bloggers an undisclosed amount of money to post a photo of themselves wearing the dress on Instagram with the hashtag #DesignLab.  While the advertising campaign was undoubtedly successful (the dress quickly sold out), none of the bloggers mentioned that they were paid by Lord & Taylor to post their photos on Instagram.

According to the FTC’s disclosure guidelines, “Bloggers receiving free products or other perks with the understanding that they’ll promote the advertiser’s products in their blogs [or social media accounts] would be covered [by the guidelines].” Such disclosures must be “accessible on all platforms used” and “clear and conspicuous.” The FTC suggests using “#Ad”, “Ad:” or “Sponsored” in tweets to be clear that a tweet or link within a tweet includes compensated content, and also placing clear disclosures near the beginning of your posts.

The FTC guidelines make it clear that when in doubt, it’s best to conspicuously disclose when a post or review is an ad or a sponsored message. Required disclosures “should not be relegated to ‘terms of use’ and similar contractual agreements” (i.e., Terms of Use, Privacy Policy, etc.) per the FTC Guidelines.

For a recent summary and expansion on the FTC’s .com Disclosures, see this article by Christine Buzan.   As the author points out, even though .com Disclosures are helpful and includes more than a dozen examples where disclosure may be required, its direction on how to comply (i.e., issues of disclosure size, placement and location) with the FTC’s guidelines are frustratingly vague– “There is no set formula for a clear and conspicuous disclosure; it depends on the information that must be provided and the nature of the advertisement.”

For more information contact:
Christopher E. Ng, Esq.
Gibbs Giden Locher Turner Senet & Wittbrodt LLP
1880 Century Park East, 12th Floor
Los Angeles, California 90067
Phone: (310) 552-3400
email: cng@gibbsgiden.com

twitter@bizlawprof360

The content contained herein is published online by Gibbs Giden Locher Turner Senet & Wittbrodt LLP (“Gibbs Giden”) for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel.

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