The Federal Trade Commission has set out specific guidelines for companies engaging in Internet advertising. Very similar to the advertising regulations governing traditional media channels, Internet advertising is more strictly scrutinized, given the complex nature of web designs. These guidelines set out certain criteria by which companies must abide in order to avoid consumer confusion. More specifically, advertisements must include all information that is relevant and material to the purchase, and any absence therof must not be so material as to change the landscape of the product promotion or content. For example, if an item is offered at a specific price point, any additional fees contingent to the basic use of the product must be conspisuously disclosed - generally, that means right next to the purchase price. The better method is to include as much of your costs into the price as you can. Another issue that you may encounter is the product claims. Many companies encounter problems with the FTC because of false or unsubstantiated product claims. The FTC holds companies responsible for any claims they make about their products. Example: the diet pill industry has encountered substantial attacks for its failure to substantiate its claims of weight loss.
Tips for businesses
The FTC suggests that advertisers identify all express and implied claims in which the ad purports to identify. This practice should focus on the totality of the advertisement as a whole – whether the advertisement is clear in its representation of all claims, or whether it can be construed to contain other claims in which the product cannot support. If an advertisement claim requires additional information in order to clarify or prevent consumer confusion, the business must clearly and conspicuously display the clarifying information. For example, if a product is offered as “free,” any additional requirements to achieve the product without cost, shall be clear and conspicuously displayed near the offer (users of “free” programs with conditions enter are encountering a highly regulated form of advertising. Placement of “free” claims with conditions in advertisements MUST consider whether the consumer will readily view the conditions – consumer complaints will trigger the attention of the FTC. Advertisers encountering complaints in reference to “free” promotions will generally not prevail).
The FTC utilizes, among many criteria, the following in their determination of whether Internet advertisements fall within FTC acceptable advertising standards:
Lengthy web pages often contain disclosures at the end of a web page. Under these circumstances, the advertiser must consider whether the consumer will actually scroll to the bottom of the web page to encounter the disclosure. If an advertiser cannot avoid “footer” disclosures, they should place “teasers” on the page to force the consumer to continue scrolling to the bottom. A good method is to place a “terms and conditions” link next to the claims that alert the consumer to click and review all terms related to the ad. Per the FTC, “Avoid Web page formats that discourage scrolling.”
For additional information on Internet Advertising, visit www. ftc.gov.
THE INFORMATION ABOVE IS AN OVERVIEW OF LEGAL ISSUES RELATING TO CORPORATE COMPLIANCE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE.