The Federal Trade Commission Watches Online Advertising
While many federal agencies have become active in regulating the Internet, the Federal Trade Commission (“FTC”) has taken an aggressive role in regulating advertising and privacy online. When advertising and marketing online, it is the FTC and its many rules and policies that will most likely impact a small business’ behavior.
What The FTC Does:
The FTC carefully monitors advertising trends online to ensure that consumers are protected. It periodically releases guidelines that companies should very carefully review, as these provide insight into the agency’s thinking. In its recent publications, the FTC has made clear its understanding of the duties of businesses operating online.
FTC Guidelines To Be Aware Of:
In a report released by the FTC in 2000 entitled “Dot Com Disclosures,” which remains the guiding series of principles that govern its attitudes towards online commerce, the agency has enunciated the view that:
Offline advertising laws and regulations apply online. Thus, traditional prohibitions against unfair acts or practices have been vigorously enforced by the agency against those acting inappropriately online.
Consumer protection laws apply online.
Any required disclosures must meet special rules applicable to online activity. The agency has carefully articulated how disclosures can be placed effectively online at websites, on link pages, and in other common online situations.
Advertising must be truthful and not misleading. Quite simply, advertising must tell the truth and not mislead consumers.
Advertisers must have substantiation to back up any express or implied objective claims made. This is especially true if the claims concern health, safety, or product performance.
Advertising cannot be “unfair.” This encompasses the view that advertising must be fair to both consumers and other businesses. The FTC is increasingly geared towards insuring that the online activities of various businesses are not “anti-competitive.”
Advertising geared towards children faces special scrutiny.
Be Careful When Advertising Online:
If your small business has a website (and it should), be wary of the FTC’s guidelines when advertising and marketing. Develop a good advertising plan that takes into account the FTC’s policies. Remember, if your advertising is truthful and not misleading, you should be in good shape.