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FTC Updates Rules on Social Media Ad Disclosure

By | 03.19.13

FTC Updates Rules on Social Media Ad Disclosure

The Federal Trade Commission recently updated its guidelines for online advertising, emphasizing advertisers’ responsibility to disclose information in a “clear and conspicuous” manner across the spectrum of social media platforms. The new regulations are intended to guard today’s consumers from deceptive social media marketing practices.

The updated guidelines replace the original FTC regulations known as the “Dot Com Disclosures,” issued at the height of the technology boom in 2000. The FTC acknowledges that although the Dot Com Disclosures were relevant to the technology of the time, new rules are necessary due to the subsequent growth and evolution of social media.

Users of Facebook, Twitter and other social media have accepted, to a great extent, that being confronted with dubious advertisements is the price to pay for access to free social networking. Yet the FTC insists that more can be done to protect and inform consumers concerning products and their origins. Under the new regulations, advertisers are required to place highly visible disclosure statements on all devices that consumers may use to view the ad.

John Simpson, Privacy Project director at Consumer Watchdog, says, “It’s really important that they’ve taken that step. Whether the FTC can keep up with a lot of practices is still an open question. It’s very easy to capitalize on the big names in social media.”

For the most part, older guidelines have simply been updated to include new media. Whereas the “Dot Com Disclosures” required that advertisers print disclosures on the same page as their advertisement, the new rules state that disclosures should be placed “as close as possible” to the ad claim, acknowledging the expanding use of smartphones with small screens. The FTC has also told marketers to avoid using pop-ups to display disclosures, as these are often blocked, and not to put them in links or to attempt to use distraction techniques to take a consumer’s attention away from the disclosures.

The FTC may impose a fine on rule violators but consequences of infringement are not discussed in the commission’s report. In a statement, the agency says that it “has enforced and will continue enforcing its consumer protection laws to ensure that products and services are described truthfully online, and that consumers understand what they are paying for.”

Sources:

Federal Trade Commission. “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.” March 2013.

Press Release. “FTC Staff Revises Online Advertising Disclosure Guidelines.” Federal Trade Commission. March 12, 2013.

Roger Yu, “FTC: Ads on mobile, social media must show disclosures.” USA Today, March 12, 2013.

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