The Federal Trade Commission (“FTC”) recently brought enforcement actions against dealerships regarding their online advertising practices. The most discussed enforcement action targeted dealers who made claims related to negative equity online. Afterwards there was some confusion as to the extent of the FTC’s application of consumer protection laws to online advertisements. Last week the FTC issued guidance that clarified its position on what kinds of online advertisements would be considered deceptive and unfair. While you can obtain a copy of the publication by clicking here, I have provided a brief overview of key parts of the guidelines below:
- The same consumer protection laws that apply to commercial activities in other media apply online, including activities in the mobile marketplace. The FTC Act’s prohibition on “unfair or deceptive acts or practices” encompasses online advertising, marketing, and sales.
- Your advertisements should contain disclosures located close to “trigger terms” like sale price, payments, etc. It is not enough to include a hyperlink to a separate webpage with the disclosure. You also should evaluate the effectiveness of these disclosures by staying abreast of where consumers look and do not look on your webpage.
- If limitations of a particular online media make disclosure unfeasible, you should consider not using that media to advertise offers containing “trigger terms.” For example, the social media website Twitter limits communications to 140 characters. Any advertisements on Twitter that contain “trigger terms” must include disclosures that fit within the character limit.
- Your disclosures must be legible regardless of the device consumers use to view the advertisement. You will need to make sure that consumers can view your advertisements and disclosures on a variety of devices, such as desktop computers, laptop computers, tablets, and smartphones.
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