First released in 2000 and updated in 2013, the FTC’s .com Disclosures guidance has been relied on by advertisers hoping to “make effective disclosures in digital advertising” for the last two decades. The FTC’s Leslie Fair recently explained that the guidance has grown a bit stale, especially in light of how quickly technology changes. In a June 3, 2022 blog post, Ms. Fair shared that the .com Disclosures document would be getting a “start to finish reboot, given the major changes in advertising tactics and techniques that marketers use.” In connection with this effort, the FTC issued an extensive Request for Information from the public, with all comments due to the FTC on or before August 2, 2022. Being aware that new guidance is likely coming sometime in 2023 is useful as a “save-the-date” and makes the advertising law nerds among us excited, but an update to the .com Disclosures also has practical implications.
More than just a useful tool for advertisers, the .com Disclosures are used to set regulatory expectations that can be legally enforced. Indeed, the guidance is cited in more than 80 NAD decisions and countless FTC enforcement actions and is one of the primary ways the FTC makes crystal clear what it expects from advertisers. For that reason, any advance notice on what will be changing or where the FTC’s focus will be can help advertisers get ahead of potential enforcement risk. Ms. Fair’s blog post and the information included in the Request for Information reiterate where the FTC is currently focused and may provide clues as to where the FTC’s attention will be moving forward.
For example, Ms. Fair’s blog post reinforces the FTC’s October 28, 2021 announcement that it would be focusing its efforts on advertisers using “dark patterns” and other practices that deceive consumers online. The term “dark patterns” has grown in popularity over the last couple of years, and is broadly used to describe a number of purposefully or accidentally manipulative website and mobile app designs that lead consumers into doing something unintended. For example, the Request for Information asks about advertising content embedded in games, social media advertising, and the interplay between linked webpages and the ability for consumers to track the details of a transaction. The same FTC announcement highlighted a recent enforcement policy statement and said businesses must:
- “Disclose clearly and conspicuously all material terms of the product or service, including how much it costs, deadlines by which the consumer must act to stop further charges, the amount and frequency of such charges, how to cancel, and information about the product or service itself that is needed to stop consumers from being deceived about the characteristics of the product or service. The statement provides detail on what clear and conspicuous means, particularly noting that the information must be provided upfront when the consumer first sees the offer and generally as prominent as the deal offer itself.
- Obtain the consumer’s express informed consent before charging them for a product or services. This includes obtaining the consumer’s acceptance of the negative option feature separately from other portions of the entire transaction, not including information that interferes with, detracts from, contradicts, or otherwise undermines the consumer’s ability to provide their express informed consent.
- Provide easy and simple cancellation to the consumer. Marketers should provide cancellation mechanisms that are at least as easy to use as the method the consumer used to buy the product or service in the first place.”
See October 28, 2021 announcement.
The FTC isn’t just providing guidance for guidance’s sake—it’s following through and pursuing wide ranging enforcement—including fines. Either by failing to give consumers sufficient information to know exactly what they are purchasing before they complete a purchase, that they are receiving a subscription or will be charged automatically renewing fees, or making it difficult or impossible to cancel, this serves as another loud reminder: The FTC is paying attention and advertisers would do well to ensure consumers understand each part of the transaction and provide informed consent where required.
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