FTC Tackles Less ‘Real Estate’ With Requirements for Disclosures on Mobile Platforms
Disclosures and other significant information must be made clear and conspicuous to customers making purchase decisions on mobile and online platforms, technology experts and state and federal government officials said Wednesday at the FTC. Tailoring disclosures and consent messages for mobile use was part of the discussion at the commission’s workshop on updating its 12-year-old “Dot Com Disclosures,” the online ad disclosure guidance.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
There has to be a fundamental shift in the way the FTC views advertising and consumer behavior, said Linda Goldstein, legal and government affairs committee chair at the Promotion Marketing Association. The commission tends to take a linear and static approach, she said. In today’s environment there may not be a webpage on the particular platform the consumer is using, she said: Consumers “go in and out of disclosures and interact with content differently than 10 years ago when these guidelines were established."
Providing hyperlinks on mobile devices is a way to lead customers to important information, the technology executives and government officials said. They're appropriate and “we need more use of hyperlinks to disclose information,” said Goldstein. Hyperlinks or labels must convey a significant message to the consumer, like a 100 percent money-back guarantee for refunds or restocking fees, said Paul Singer, assistant Texas attorney general in the consumer protection division. While the fees may be listed in another place, “the hyperlink or label signals to the customer that they may want to keep reading,” he said.
Important health-related information should be disclosed through hyperlinks, said Svetlana Walker, counsel for ads at Clorox Co. “It’s impossible to condense this type of information on the kinds of screens the consumers are viewing.” Companies should avoid giving consumers a false sense of security “that they have all the information they need just by reading a disclosure they get online or on a device at the time of purchase,” she added.
Disclosure policies should include requirements for placement of significant information, the panelists said. Disclosures and other information that is significant before and throughout placing an order online or on a mobile device should be made “in a concise manner and proximate to the actual claim it’s modifying,” Singer said. It has to be so obvious “that you won’t miss it at the point of making the purchase,” said Steve DelBianco, NetChoice executive director. Disclosure needs to happen early enough in the consumer’s order path to the purchase, Goldstein said.
Some panelists said use of the term “disclosure” may become problematic. It may be completely meaningless to consumers, especially if it’s associated with a legal concept, said Jennifer King, a Ph.D. candidate at the University of California-Berkeley School of Information. When companies offer services on a mobile device, they must decide what the salient features are, said David Schellhase, Groupon general counsel. To disclose terms around a refund or fees, “you have to be up front or you'll ‘mis-set’ a consumer expectation,” he said during a later panel.
Some disclosures should be placed by the shopping cart feature right before the sale, said Michelle de Mooy, senior associate for national priorities at Consumer Action. “If you have a phone that’s not that fast, scrolling down can be a real hindrance.” Advertisers need to think how they're going to convey the information to consumers, said Jim Halpert, Internet Commerce Coalition general counsel. It’s worth planning to figure out how to inform consumers, “so they're not going to be angry at your brand because they didn’t see the restrictions,” he said.