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Online ads involve special compliance considerations

November 23, 2010
Requirments for disclosures in Internet advertisements mirror any such requirements for ads placed in more traditional print and electronic media, attorneys reminded an audience Jan. 14 at a workshop, "Green Lights & Red Flags: FTC Rules of the Road for Advertisers." Online ads must be clear and conspicuous, of course. But there are other considerations unique to an Internet ad, said Steven Wernikoff of the Federal Trade Commission. Disclosures should be placed near or on the same screen as the triggering claim, and the Web page should use text or visual cues to encourage scrolling by consumers, to uncover all information. Hyperlinks usually are necessary when full and complete disclosures are too lengthy to be placed near the claim, or need to be repeated. However, hyperlinks should be avoided if a disclosure is integral to the meaning of the claim, such as information about unexpected costs or safety warnings. In such cases, the disclosure should be positioned next to the claim. If banner ads are employed, necessary disclosures should appear within the banner, or consumers should be directed via hyperlink to the disclosure. Web page designers should recognize the importance of disclosures too. A disclosure should not be hard to find on the page and it should not be presented in colors-white lettering on a light background-that makes it difficult to read. Designers also should recognize the technological limitations of the average consumer's computer. In other words, sites that use bells and whistles like plugins and Java might look great, but they won't communicate anything if the reader doesn't also have that software. Attorneys for the FTC used the workshop to outline how they treat advertising infractions. The type of correspondence the agency sends to a merchant or advertiser- an access request or a civil investigative demand- can suggest the seriousness of the FTC's pursuit on a matter. The agency conducts no "informal" explorations, said C. Steven Baker of the FTC. "We're either going to investigate or we're not," he said. Conversely, a state's attorneys office can make informal requests for information before resorting to a CID. Workshop panelists agreed that any merchant facing an investigation by a governmental agency should be forthcoming. James Jeffries, a Wisconsin assistant attorney general, said that if fines are warranted, an attorney general's office likely will negotiate the settlement amount. Not so with the FTC, said Baker. "The initial demands for money made by the FTC are pretty much where the office intends to end negotiations, so the offender rarely can whittle down the original demand," he said. Effective compliance also comes from self-regulation, such as the BBB-CATA Automobile Advertising Review Program, coordinated by the Chicago office of the Better Business Bureau. The BBB examines the expanse of advertising by CATA dealers and notifies a dealer whose ad does not comply with the state's advertising regulations. The BBB allows the dealer five days to correct the ad before notifying the Illinois attorney general's office, thereby serving as a sort of fire wall. James Baumhart, president of the Chicago BBB office, said his agency challenged 502 dealer ads in 2002 under the program, but just 12 of the offenders eventually were referred to the attorney general's office. One subsequent fine totaled $200,000.