FTC seeks industry input on modernizing its “.com Disclosures” guidance

The FTC is seeking public comments on potential revisions to its 2013 guidance regarding digital advertising and marketing, titled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.” ¹ The guidance offers suggestions and advice to businesses related to digital advertising and marketing. The deadline to submit comments is August 2, 2022. ² Ahead of issuing revised guidance, the request for comment itself provides valuable insight into FTC’s focus, and potential enforcement priorities, with respect to the disclosure of material information in the context of new and emerging digital and other media. While emerging technologies and trends in social media create novel complexities for advertisers, the threshold principle that material information must be adequately disclosed in all advertising remains well-established.

In its press release, FTC highlighted its growing concern that some companies incorrectly use the guides to justify practices that mislead consumers. For example, the agency noted that some firms have attempted to claim they can avoid liability under the FTC Act by hiding or burying disclosures in hyperlinks, a practice that can be harmful to consumers. Additionally, the agency seeks to eliminate parts of the guidance that are no longer relevant and update the guidance to better protect customers navigating the modern digital marketplace. The project is one of numerous FTC initiatives recently undertaken by the agency to tackle dark patterns and deceptive digital practices.

The request for information identifies several issues for which the agency seeks public input, including the following:

• The use of sponsored and promoted advertising on social media platforms;
• Targeted and embedded forms of advertising, including virtual reality and micro-targeted ads;
• Whether the current guidance is sufficient to address ads on mobile devices;
• Whether additional guidance is necessary to reflect the multi-party selling arrangements involving e-commerce;
• How the guidance on the use of hyperlinks can be updated to better protect consumers; and
• The adequacy of online disclosures when consumers need to navigate through multiple webpages.

The complete list of questions for comment in the request for information can be found in Appendix 1, below.

Next steps

Proactive companies will view the topics identified by the FTC as an opportunity to revisit their existing and any new advertising policies.   Advertisers will be well-served by not waiting for the FTC to issue new guidance.  The .com Disclosures guidance is dated and updated guidance will be instructive but the underlying principles are likely to remain unchanged.  Please contact Hogan Lovells if you have any questions about the relevance of the request for comments and the broader implications for how material information can be effectively disclosed in an ever-growing complex digital world.   

Appendix 1

List of Questions for Comment from the FTC

FTC Staff Requests Information Regarding Digital Advertising Business Guidance Publication (FTC-2022-0035-0001)

1. What issues raised by current or emerging online technologies, activities, or features, such as sponsored and promoted advertising on social media platforms or otherwise, the use of advertising content embedded in games, or the use of dark pattern techniques in digital advertising, should be addressed in a revised guidance document?  Why and how should they be addressed?
2. What issues raised by new laws or regulations should be addressed in a revised guidance document?  Why and how should they be addressed?
3. What research or other information regarding the online marketplace, online advertising techniques, consumer online behavior, or consumer mobile behavior should the staff consider in revising its online advertising guidance document?
4. What research or other information regarding the effectiveness of disclosures – and, in particular, online disclosures – should the staff consider?
5. What specific types of online disclosures, if any, raise unique issues that should be addressed in a revised guidance document separately from a discussion of general disclosure requirements?
6. What guidance in the .com Disclosures document is outdated or unnecessary?
7. What guidance should be clarified, expanded, strengthened, or limited?
8. How can the guidance on the use of hyperlinks be clarified to provide better guidance on the appropriate use of hyperlinks and how hyperlinks should be labeled?
9. Does the guidance adequately address how to make qualifying disclosures when consumers must navigate multiple webpages in order to complete a purchase?  If not, how should the guidance be modified?
10. The guidance says that when designing space-constrained ads, “disclosures may sometimes be communicated effectively to consumers if they are made clearly and conspicuously on the website to which the ad links.”  Should that guidance be modified, and if so, how?  Should the guidance document clarify when a disclosure on a marketer’s website can and cannot be sufficient to prevent a representation in an earlier communication that links to the website from being misleading?
11. Does the guidance adequately address advertising on mobile devices?  If not, how should the guidance be changed?
12. Should the guidance document address issues unique to specific audiences or demographics in seeing, hearing, or comprehending disclosures?  If so, how should the guidance be modified?  Should any such guidance address microtargeted advertisements, and if so, how should it do so?
13. Should the guidance document address issues that have arisen from multi-party selling arrangements in internet commerce such as (1) established online sellers providing a platform for other firms to market and sell their products online, (2) website operators being compensated for referring consumers to other internet sites that offer products and services, and (3) other affiliate marketing arrangements?  If so, how should the guidance be modified?
14. Should the guidance document address issues that have arisen with respect to advertising that appears in virtual reality or the metaverse, and, if so, how should those issues be addressed?
15. What additional issues or principles relating to online advertising should be addressed in the guidance document?
16. What other changes, if any, should be made to the guidance document?

Authored by Steve Steinborn and Connie Potter.

References

1 Press Release, FTC, FTC Looks to Modernize Its Guidance on Preventing Digital Deception (June 3, 2022).

2 Comments may be submitted on Regulations.gov to docket FTC-2022-0035: FTC, Digital Advertising Business Guidance Request for Information (June 3, 2022).