Previously published in Response magazine
It was billed as a workshop that would bring Web marketers, Federal Trade Commission officials and others together to explore how government regulations written for print and other traditional media should be applied to advertising on the Internet. The FTC's announcement of the workshop stated that its purpose was to "inform the Commission's analysis" of Internet advertising, and that the agency would carefully consider the views expressed by workshop attendees when it applied its rules to the Internet.
But the provisions of a little-noticed FTC order that was issued only two days before that workshop led some to conclude that the agency may have already made up its mind on one key issue before hearing from those who participated in the workshop.
The FTC's largest meeting room was standing room only when the Internet advertising workshop got underway. The participants included representatives of Fortune 500 companies (including AOL, Ford, and Dell Computer) and prominent trade associations as well as federal and state government officials and consumer groups.
Most of the workshop was devoted to a discussion of how Web marketers should make the disclosures required by FTC rules -- for example, the "Your results will vary"-type disclosures that usually must accompany consumer testimonials for a product or service. Generally, such disclosures must be "clear and conspicuous" to pass legal muster. Print and television advertisers have a pretty good idea of what that standard means. But what does "clear and conspicuous" mean on the Web?
The FTC staff has said that the factors affecting whether a disclosure on a Web page is clear and conspicuous include the disclosure's proximity to the claim that it qualified (for example, is the disclosure adjacent to the claim, or at least on the same screen, or does the consumer have to scroll down or click on a hyperlink to see it?) as well as the disclosure's prominence (does it appear in a smaller font or in the middle of a long block of text?)
One hotly debated issue was whether disclosures must be "unavoidable" to be clear and conspicuous. The FTC's original 1998 notice seeking public comment on the issue said that the agency believed that consumers should necessarily be exposed to any required disclosure "without having to take affirmative action, such as scrolling down a page [or] clicking on a link to other pages." But virtually all the businesses and business groups who filed comments in response to that notice opposed this standard.
A later FTC notice concerning the workshop didn't mention unavoidability, which seemed to indicate that the agency might be rethinking its original proposal. At the very least, that notice signalled that the agency was not going to make up its mind until it heard what those who were going to attend the workshop had to say.
But a recent consent order against exercise product marketer Fitness Quest -- an order that was issued only two days before the workshop was convened -- contained a provision that indicated just the opposite might be true. The Fitness Quest order first set forth certain standards for required disclosures in print and television advertising by the company, then stated that its Internet advertising must not only meet those standards but also "be unavoidable and shall be presented prior to the consumer incurring any financial obligation."
Of course, FTC consent orders apply only to the parties named in them. But the provisions of such orders are often the best evidence of the Commission's thinking on an issue. Despite its staff's protestations to the contrary, it appears that the FTC has set a de facto standard of unavoidability for Internet advertising disclosures. If your Web site disclosures aren't unavoidable -- that is, if consumers must scroll down or click on a link or a button to view them -- they may not be acceptable to the government.