The FTC Needs to Update Its .com Disclosures Guidance

Yesterday, TINA.org filed a comment in connection with the FTC’s request for information regarding its .com Disclosures guidance (last revised in March 2013), which focuses on how advertising disclosures should be presented in digital marketing materials to avoid deception. In our comment, we highlighted various areas of digital marketing where effective disclosures are critical, including:

• Stealth advertising, an area that TINA.org has focused on extensively, cataloguing thousands of examples of undisclosed ads on digital platforms, issuing warning letters to more than 35 brands and influencers (the most recent of which concerned repeat offender DJ Khaled) and filing complaints with regulators regarding more than 125 companies and influencers (most recently regarding Roblox);
• The use of exceptional earnings claims by multilevel marketing companies to recruit distributors without properly disclosing typical earnings, another area that TINA.org has focused on for years, and the subject of a recent comment we filed with the FTC this spring;
• Cancer centers’ use of testimonials from patients who experienced atypical success without adequately disclosing what patients with similar diagnoses should expect, which was at the center of a 2018 TINA.org investigation and complaint;
• Made in USA advertising that fails to conspicuously disclose the origin of foreign parts, an area that TINA.org has investigated numerous times and which formed the basis of our 2019 Petition for Rulemaking to the FTC, resulting in the agency ultimately enacting a Made in USA Labeling Rule; and
• Online subscription marketing for products and services that doesn’t properly disclose the terms of the subscriptions, an issue TINA.org has alerted regulators to on several occasions, most recently with our HelloFresh complaint.

These areas, among others, highlight how online marketing lacking effective disclosures is a widespread problem that significantly impacts consumers’ perception of what they are purchasing, as well as what is and is not marketing material. And the problem has only been exacerbated with the rapid rise of digital marketing since the FTC’s guidance was last updated nine years ago.

In fact, when the commission last updated the guidance, in 2013, digital marketing was in a relatively nascent stage, with e-commerce accounting for little more than five percent of retail sales and only half of Americans owning a smartphone. Now, the vast majority of American consumers use the internet daily, with almost a third reporting to be online “almost constantly,” and advertisers are spending nearly $200 billion on digital marketing annually. Unfortunately, as digital marketing has expanded, so too has the number of advertisements and endorsements that violate FTC law, including in the areas listed above.

To help rein in this deceptive marketing, TINA.org’s comment urges the FTC to update its .com Disclosures guidance to include numerous contemporary digital advertising issues, including how to properly disclose material information in:

• advertising content embedded in video games and metaverse platforms such as Roblox;
• short-lived social media content such as Snapchat stories; and
• social media marketing that is not accompanied by conspicuous captions, such as TikTok videos, Instagram reels and tile views.

Our comment also urges the FTC to address in its guidance how disclosures can and should be used to address certain dark patterns, a type of deceptive marketing we exposed in our HelloFresh and Agora investigations, among others.

And because so much about truth in advertising is interconnected, our comment also references previous comments we’ve filed with the agency, such as our July 2022 comment regarding how to protect kids from stealth advertising in digital media (to push the FTC to make clear in its updated guidance that disclosures do not work for certain young children), as well as our June 2020 comment regarding the agency’s Endorsement Guides (to argue again that marketers who use creative disclosures should be required to substantiate with reliable data that the net impression of their advertisements is non-deceptive).

We’ll be keeping a close eye on what the FTC does vis-à-vis this guidance.

To read our full comment, click here.