Is Your Ad Legal? Digital Advertising Raises Additional Issues for Marketers
With the explosive growth of e‑commerce and the online marketplace, more and more businesses are moving away from traditional print advertising in favor of a stronger digital footprint. Businesses are soliciting customers through multiple digital venues, including their own websites; social media sites (such as Facebook, Twitter, YouTube, etc.); blogs; mobile devices; advertising on print, radio, television and other online media websites; and other third party and commercial sites.
While a strong online presence benefits both businesses and customers, it creates a host of legal issues for businesses and their online marketing strategies. As new technology continues to emerge, new issues will arise and, as a result, businesses that choose to engage in digital advertising will need to remain vigilant of, and current with, new and revised regulations.
Regardless of the advertising medium utilized by a business, the general principals of advertising law apply. The Federal Trade Commission (FTC) is the federal agency tasked with the responsibility of enforcing consumer protection laws. The primary statute relied upon by the FTC in this area is the FTC Act, a federal law that contains a very broad prohibition of the use of "unfair or deceptive acts or practices" in sales methods, advertising claims, and marketing and promotional activities.
The FTC has undertaken, and will continue to undertake, enforcement actions in an effort to impose this prohibition on the use of unfair or deceptive acts or practices, and ensure the truthful marketing of products and services by businesses. Several recent enforcement actions have focused less on traditional print advertising and more on digital advertising.
One of the primary issues in the analysis of any advertising material is the disclosure of details. Advertisers are required to include certain disclosures (i) when the advertised offer is likely to be misleading without the disclosure of such details or (ii) when required by certain regulatory or guidance authority. A classic example of an advertisement requiring such disclosures is that of a home security system for $XX.XX per month, when, in reality, a customer would also need to purchase multiple cameras and other products or services. The mere advertisement of the monthly service fee is likely to be misleading if, in order to get that monthly service rate, a customer is also required to purchase or incur significant additional charges beyond the basic advertised cost.