FTC Clarifies Obligations of Product Reviewers, But Does Not Ease Concerns

On March 12, 2013, the Federal Trade Commission released a new guidance paper entitled ".com Disclosures: How to Make Effective Disclosures in Digital Advertising." The new FTC guidance updates a prior FTC release from 2000 relating to disclosures in online advertising. The new guidance also provides some answers to questions raised by the agency's 2009 Guides Concerning the Use of Endorsements and Testimonials in Advertising, which caused substantial concern among bloggers and users of social media who write product reviews due to a lack of clarity as to their obligations.

Scope of the New FTC Guidance

The FTC has long taken the position that some online advertisements can be deceptive when not accompanied by certain clarifying disclosures. Such disclosures might relate to pricing, product materials or ingredients, or any of a number of other issues -- including identification of sponsored endorsements, as discussed in the 2009 endorsement guidelines. The agency's position on effective online disclosures is straightforward:

The ultimate test is not the size of the font or the location of the disclosure, although they are important considerations; the ultimate test is whether the information intended to be disclosed is actually conveyed to consumers.

There is no litmus test for determining whether a disclosure is clear and conspicuous, and in some instances, there may be more than one method that seems reasonable. In such cases, the best practice would be to select the method more likely to effectively communicate the information in question.

The devil is in the details, of course, and the bulk of the FTC guidance is dedicated to discussing how to make disclosures clear and conspicuous in the context of online content. Key points include:

• Advertisers and those offering products for sale online must take into account the platform on which content is being viewed.  A disclosure on a website that is clear and conspicuous when viewed using a laptop or desktop browser might not be when viewed on a mobile device, particularly if scrolling is required to see the disclosure on a smartphone screen. Disclosures should be presented in a manner that either translates between fixed and mobile screens without loss of clarity, or there should be a mobile-optimized version of the site. Disclosures via pop-ups, Flash, or similar technologies might not be effective due to a lack of software support (e.g., Flash on Apple mobile devices) or tools that would prevent the disclosure from appearing (e.g., pop-up blockers).

• Disclosures in multimedia campaigns should be presented in the same medium as the content to which they relate: audio disclosures for audio claims, written disclosures for written claims, et cetera. Necessary disclosures should be as prominent as the claims to which they relate; fleeting disclosures in a video clip are unlikely to be effective.

• Disclosures should not be "buried" in Terms of Service or other lengthy contractual or contract-like content. "Even if such agreements may be sufficient for contractual or otherpurposes, disclosures that are necessary to prevent deception or unfairness should not berelegated to them. Similarly, simply because consumers click that they 'agree' to a term orcondition, does not make the disclosure clear and conspicuous."

• Hyperlinks may be used to connect readers to disclosures, but only in certain circumstances. Where the disclosure is "integral" to the advertisement (for example, disclosing that a necklace offered for sale is costume jewelry), it must appear in the text of the ad. Where hyperlinks are permissible, they must be conspicuous, clearly inform the reader about the nature of the linked disclosure, and lead directly to the disclosure in a location where it is prominently displayed. The use of a clickable symbol or icon to lead to disclosures is unlikely to suffice, unless the symbol/icon is widely understood by consumers.

• "Space-constrained ads" (think Twitter) are not exempt from disclosure requirements. Disclosures may sometimes be made on a website linked from a tweet rather than in the tweet itself, but where a consumer might view the tweet and purchase an advertised product in a brick-and-mortar store rather than proceed to a linked site, the advertiser must consider whether the tweet standing alone would be deceptive. As with the use of other symbols and icons, identification of sponsored and advertising content via hashtags is unlikely to be effective unless the hashtag is widely recognized. Disclosures in separate tweets are unlikely to be effective where posts from other users coul<