The Federal Trade Commission (FTC) last month announced the agenda for its workshop “Putting Disclosures to the Test,” (Workshop) planned to take place on September 15 in Washington, DC. The Workshop will focus on testing and evaluation of disclosures in both digital and traditional media.
Last summer, we noted that disclosures, especially for endorsements and testimonials, were coming onto the FTC’s radar and would likely see heightened enforcement. Since then, the FTC has increased its scrutiny of advertising and privacy practices where it believes marketers are not adequately disclosing key details to consumers. For example, Warner Brothers Home Entertainment in July settled the FTC’s charges that it instructed paid social media influencers of the video game Middle Earth: Shadow of Mordor to place disclosures below the fold, such that they were visible only after clicking a “Show More” button.
The Warner Brothers case illustrates a common source of confusion for marketers: although it is often clear when marketers must make disclosures, there is often a question of how they should make those disclosures. The size, location, and content of disclosures vary with each execution, and we are faced with the ever present question: “will consumers actually read this?” To that end, the FTC has assembled panels of psychologists, information scientists, and marketers to discuss testing methodologies and the lessons they are learning from such testing.
FTC’s workshops often signal future regulatory actions, including new guides, guidelines, or enforcement priorities. Although the FTC has noted its focus on digital disclosures, the various panels also include discussions of gaming, privacy policies, product labeling, nutritional labels, and even informed consent for medical patients. The Workshop may therefore signal a broader shift in the way that the FTC looks at and assesses disclosures, and could potentially elevate the importance of testing in evaluating the adequacy of disclosures.
We will be attending the Workshop, and will be particularly interested to hear what Chairwoman Ramirez, Bureau of Consumer Protection Director Jessica Rich, and various other speakers from the FTC will have to say.
How I see It
- Marketers should expect the FTC to continue and even increase its aggressive enforcement of online disclosure requirements.
- The Workshop may signal a heightened focus on the form (rather than just the existence) of disclosures. Marketers should remain mindful that there are very few “one size fits all” methods of making disclosures to consumers, and that the effectiveness of any disclosure will depend on the context in which it is made.