FTC Workshop: Advertising & Privacy Disclosures in the Cross-Platform, Social Media, and Mobile Spaces

At the FTC's In Short workshop, representatives from industry, trade groups, consumer advocacy groups, academia, and state and federal government agencies weighed in on whether the FTC's 2000 Dot Com Disclosures guidance document remained relevant for social media and mobile devices. Noting the drastic changes in the ways that consumers use the internet in the eleven years since the document's publication, the agency held four panel discussions addressing how material information should be disclosed in new media and mobile device platforms.

The panelists agreed that the core principles of the Dot Com Disclosure guidelines providing clear and conspicuous disclosures that are prominently placed near the claim that it qualifies remains good policy. However, most panelists agreed that the difference in readable space on mobile devices and character limits in social media presented unique compliance challenges. There was a consensus that advertising platforms must conform to the law, and not vice versa. Several panelists went as far as to say that if an advertiser using a particular platform could not conform, then it should not be advertising in that space.

Another consensus of the panels was that disclosure techniques such as separate webpages with long terms and conditions were ineffective, and could not just be copied onto mobile devices. Instead, both the FTC and industry experts expressed a preference that disclosures be part of the interactive aspects of websites and apps. Presentations from industry experts and academics emphasized the importance of website and app design that integrates disclosures into the user experience. Presenters noted that when using websites and apps users are goal oriented, focused on the information or actions they want and often ignoring disclosures. In studies, users consistently skipped or did not read disclosures, stating that they did not understand what the disclosures meant and were unlikely to find clarification.

The space limitations of social media such as Twitter and non-verbal social media actions such as Facebook "likes" present challenges to complying with FTC rules requiring disclosure of "material connections" between advertisers and endorsers. Discussing advertising through tweets, panel members disagreed about the effectiveness of using the word "Ad," hashtags such as "#Sponsored" or"#Spon," or a link to a full disclosure, citing that none was universally recognized as identifying an advertisement or sponsorship. Panelists agreed that a universal icon or font would be helpful, but did not support the idea that the social media websites themselves should be responsible for creating such a tool. The panel also divided on how much disclosure was necessary for non-verbal actions. Some panel members argued that "likes" are not designed, and are not always used, to capture a user's sentiment, and determining whether a like is organic or sponsored is beyond the capacity of the most social networks' technology. However, other panelists felt strongly about disclosing user's intentions in comments sections when liking, following, or pinning a company or product as part of a contest or sponsorship.

The most prominent sentiment of the day was that context mattered, with panelists agreeing that there are few bright-line rules that could be effective for all disclosures in all situations. Panelists agreed that the mobile experience makes the timing, appearance, and amount of information provided in disclosures very different than print, television, or even website advertising, but also allowed for greater opportunities to provide them. However, panel members also pointed out that appropriate disclosures will improve the user experience and correlate with consumer expectations. Moreover, the panel recognized that companies put their brand on the line when they engage in mobile advertising, and that the right amount of disclosure will often emerge naturally as companies attempt to develop customer relationships and maintain their brands. Nevertheless, panelists also drove home the point that companies "get" that privacy and disclosures are important, and want clear and concise guidelines to follow so that they can focus on creating more great products.

In her concluding remarks, Mary Engle, Associate Director of the FTC's Division of Advertising Practices, said that the agency hopes to release its output from the workshop this Fall.

© Arnold & Porter Kaye Scholer LLP 2012 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.