Complying With the FTC's Disclosure Requirements

If you have a relationship with a company that needs to be disclosed, then you should do so in a "clear and conspicuous" manner. Don't put it in small print or hide it away on a backwater page on your website. You want readers to easily notice the disclosure, and you want them to understand it. So make the disclosure clear and unambiguous so it can be understood by the average reader.

The form of the disclosure can be very simple. In a second FTC instructional video (embedded below), FTC staffer Mary Engle gives some examples of good disclosures:

  • "ABC Company gave me this product to try."
  • "XYZ Company sent me to their theme park to try it out for a day."

 

In March 2013, the FTC provided further information about how to make effective online disclosures in a guidance document entitled ".com Disclosures: How to Make Effective Disclosures in Digital Advertising." Among the recommendations made in the new document are the following:

  • Disclosures in multimedia presentation 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 considered effective.
  • Disclosures should not be "buried" in Terms of Service or other lengthy contractual or contract-like content. According to the FTC, "[e]ven if such agreements may be sufficient for contractual or other purposes, disclosures that are necessary to prevent deception or unfairness should not be relegated to them. Similarly, simply because consumers click that they 'agree' to a term or condition, does not make the disclosure clear and conspicuous."
  • Disclosures relating to blog posts must be placed in such a manner that readers are not likely to be distracted before viewing it. If a blog post contains links that might lead a reader away from the blogger's website, the disclosure should appear before those links.
  • Hyperlinks may be used to connect readers to disclosures, but only in certain circumstances. Where the disclosure is "integral" to an 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 required disclosures is unlikely to suffice, unless the symbol/icon is widely understood by consumers to indicate that there is important additional information beyond the link.
  • "Space-constrained" content (think Twitter) is not exempt from disclosure requirements. Disclosures may sometimes be made on a website linked from a tweet rather than in the tweet itself (for example, where a tweet indicates that a new product review has been posted on a linked website). However, where a tweet itself contains an endorsement of a product or service that requires a disclosure, the person tweeting should consider whether a reader might purchase a mentioned product in a brick-and-mortar store rather than proceed to a linked website where the necessary disclosures appear. In such cases, the disclosure should appear in the tweet itself.  A disclosure in one tweet is unlikely to be considered sufficient with respect to endorsements of a product in other tweets, because the tweet in which the disclosure appears may be separated by other users' comments from the tweet in which the endorsement appears.
  • The use of hashtags (such as #spon or #ad) to identify sponsored content in Twitter posts is unlikely to be considered effective by the FTC, unless the hashtag is clear on its face and widely understood to convey the necessary information.

Here are some additional suggestions from Stacey Ferguson of the FTC (as reported on Rebecca Tushnet's blog) on how to handle disclosure in various other media:

  • Video-sharing sites: put the disclosure in the video content and the description alongside.
  • Social networks: put the disclosure in status updates and descriptions of photos/videos and create a "discosures and relationships" section on your profile.

If you're unsure about your disclosure, consider the purpose of the disclosure requirement. The FTC is concerned about statements that look like personal recommendations or neutral reviews but are in fact advertisements. Think about your readers. Are you giving them the information they need to evaluate the credibility of your message in a way that they are both likely to see and to understand?

 

Last updated on March 27th, 2013

   
 
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