The Federal Trade Commission (FTC) made a number of changes to its regulations and guidelines in 2013.  Specifically, the FTC updated its “.com Disclosures” guide to provide advertisers with more specific instructions for complying with the FTC’s Guides Concerning the Use of Endorsements and Testimonials in various forms of new media. Moreover, the updated guide emphasized that disclosures must be clear and conspicuous on all devices and platforms where consumers may encounter advertisements and clarified methods by which advertisers can implement effective disclosures.  The FTC also announced new mobile privacy guidelines designed to improve the disclosures that appear on mobile platforms and that are used by application developers.

On the privacy side, dozens of state and territory attorneys general filed comments with the FTC addressing consumer complaints about “mobile cramming” – a practice involving the placement of unauthorized charges on consumer mobile bills for unwanted services as well as the inadequate disclosure of these third party charges.  The comments also expressed concerns about the limited mechanisms available to consumers to effectively block or dispute such charges.

A 2013 FTC ruling against juice company POM Wonderful clarified the FTC’s standard for determining whether an advertising claim is misleading. Specifically, the FTC found that, based on the overall “net impression” of the POM advertising campaign, at least a “significant minority” of reasonable consumers would believe that drinking POM juice would prevent heart disease and/or that there was clinical proof of these claims.  Applying this “significant minority” standard, the FTC concluded that the challenged claims were misleading despite the fact that most reasonable consumers would not interpret the advertising to mean that POM’s juice actually prevented heart disease.

The Way I See it

Advertisers and agencies will need to adapt to these regulatory approaches by:

  • Ensuring that clear, conspicuous and truthful disclosures are made on mobile and social media platforms.
  • Working with application developers to develop and implement effective disclosures and standardized privacy policies.
  • Recognizing that advertisers are responsible for all reasonable interpretations of their claims – even those interpretations that only a “significant minority” of reasonable consumers would believe to be true.