Gavel to Gavel: It all ads up

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The Journal Record - January 2, 2014

‘Tis the season for post-holiday sales and New Year’s resolutions. Businesses may be working a little harder to lure consumers, and that means more advertising.

Under the Federal Trade Commission’s rules, advertising must be true, backed by evidence and fair. Ads that break these rules can be investigated by the FTC, usually triggered by consumer or competitor complaints. Some kinds of advertising are subject to more scrutiny than others. Health, safety and environmental claims draw extra scrutiny and should be backed by tests, studies and scientific evidence evaluated by qualified people. If the ads violate the rules, the FTC can issue a cease-and-desist order, fine you, or make you post corrective advertising or disclosures.

So you must tell the truth and back up what you say. Sounds simple, but new ways to advertise can make compliance trickier. In 2013 the FTC issued new guidelines for advertising in social media. Bloggers who review products must disclose any connection with advertisers, including the receipt of free products and whether or not they were paid in any way by advertisers, which occurs frequently. Advertisers can no longer gush about results that differ from the typical.

It can be challenging to impart necessary information in short formats or small screens, but clear and conspicuous disclosures are required to prevent false advertising. It’s OK to use a hyperlink or a pop-up to save space, but avoid using them for disclosures about product costs, health or safety information. Label hyperlinks specifically, and consider whether they’ll be blocked or hard to see on mobile programs and devices.

Ads should incorporate limitations and qualifying information with the relevant claim, not in a separate disclosure that, let’s face it, no one would read anyway. The idea is that the information in the disclosure is something consumers need in order to make a decision about a purchase, so they must be provided in some format that makes it hard to ignore them. Disclosures should appear as close as possible to the relevant claim and must be made before consumers can add the items to their online carts.

The bottom line is that social media platforms may allow business owners to bypass some of the expense associated with more traditional advertising media, but not truth-in-advertising rules.

This article appeared in the January 2, 2014, issue of The Journal Record. It is reproduced with permission from the publisher. © The Journal Record Publishing Co.
 

Topics:  Advertising, Blogs, Consumer Fraud, Disclosure Requirements, Retailers, Social Media

Published In: Antitrust & Trade Regulation Updates, Communications & Media Updates, Consumer Protection Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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