FTC Guidelines and Internet Marketing Law

FTC Guidelines concerning Internet Marketing from an Arizona Internet Lawyer

Lately there have been many questions from our clients in the internet marketing and blogging industry about the new Federal Trade Commission Guidelines. Specifically, whether an affiliate marketer or blogger must disclose certain information on their web page, and if so how the disclaimer must be presented. This article will highlight several portions of the new guidelines and offer a framework for clients in how to disclose certain information on their websites.

In a nutshell, these questions revolve around the new FTC Guidelines that are geared at stopping false and misleading advertising, for example the Acai Berry "New Diet Pill Helps you Lose 50 pounds in 4 weeks" ads. Armed with the new guidelines, the FTC came down hard on the makers and affiliates of Acai Berry, in addition to other weight loss supplements for questionable advertising practices such as:

"WARNING! AcaiPure Is Fast Weight Loss That Works. It Was Not Created For Those People Who Only Want To Lose A Few Measly Pounds. AcaiPure was created to help you achieve the incredible body you have always wanted...USE WITH CAUTION! Major weight loss in short periods of time may occur."

In addition to the false advertising, the FTC was concerned with the "rebills" that were occurring on customers' accounts. According to the FTC Guidelines regarding Blogging, a disclaimer or disclosure must be made if there is a "sponsored communication". The examples of what is considered to be a "sponsored communication" is lengthy and cannot be summarized in one article. The FTC Guidelines did, however, provide for a few key points to remember:

- Only "material connections" must be disclosed.
- Connections are material if the reviewer received some consideration for the review (e.g., cash, merchandise, etc.).
- Guidelines impose liability on: (1) advertisers, (2) advertising agencies, and (3) endorsers (including celebrity endorsers).
- The "results may vary" safe harbor is gone - advertisers are responsible for the claims made by endorsers.

Do I need a disclaimer or disclosure on my Blog?

For those that are affiliate marketers, paid bloggers, or receiving compensation for advertising then you should place a disclaimer on your website. Some may be able to get away with a disclaimer on the page regarding the advertisements, i.e. that you are getting paid. The guidelines merely say the disclaimer must be placed "clearly and conspicuously", which is really a common sense approach. Nor do you want to go overboard and have an entire page dedicated to the disclaimer, following by a small link at the bottom to your product. Thus, each post should have a disclaimer regarding the material relationship. Even more surprising to some is the fact that the FTC Guidelines apply to advertisements on twitter. If the results of the product or service being advertised in the advertisement are not typical, it must say so in the advertisement. In addition, bloggers and other word of mouth marketers must reveal any material connections between themselves and advertisers so as to not mislead consumers. When looking at a violation of these guidelines the FTC will view each case with a "totality of the circumstances" approach, meaning they will look at the product being advertised, the claim being made, and the disclaimer provided and whether a "reasonable consumer" would be able to know that there is a connection between the affiliate and the advertiser. In other words, be careful and remember the truth hurts...but not as bad as the FTC knocking at your door.