Is the .com Disclosures guide binding law?

It is guidance, and violating it does not by itself establish a violation of the FTC Act. It can still become the measure in a particular order: a stipulated preliminary injunction in FTC v. NextClick Media defined “clearly and conspicuously,” for Internet advertisements, as consistent with the Commission staff's “Dot Com Disclosures” working paper.

Does the guidance apply only to online ads?

No, the FTC says the guidance applies to all advertisers, whatever the medium. In the Cory Fairbanks Mazda matter, the Commission pointed a commenter to it after the commenter complained about fine-print disclaimers on car-price advertisements.

Can I put a required disclosure behind a hyperlink?

Not if the information is integral to the claim; those disclosures should sit on the same page, immediately next to the claim. The guidance does leave room for a hyperlink in other situations: hyperlinked disclosures may be particularly useful if the disclosure is lengthy or needs to be repeated, and the link must be labeled clearly and conspicuously.

If my website explains the limits, does that cure a misleading ad that sent people there?

No, a website disclosure does not cure an ad that misled consumers into visiting. In the Intuit matter, the Commission applied the first-contact rule: if the ads induce consumers to visit the webpage through false advertising, disclosures on the webpage do not absolve the company of liability for the ads. The Commission also found that the TurboTax homepage did not offer clear and conspicuous disclosures in any event, because a visitor would meet more advertising rather than the disclosures.

Does it help that competitors use similar disclosures?

No, matching other companies' disclosure practices does not answer whether the ad misleads. In the Intuit matter, the Commission found that evidence that the disclaimer font and location were similar to those in other companies' ads was irrelevant. The Commission added that the benchmarking analysis did not appear to consider whether Intuit's strong “free” messages required stronger disclosures than other firms needed.

Does every social media post or ad need its own disclosure?

Yes, each ad that would need a disclosure if it were viewed on its own. In its endorsement guidance, the FTC quotes .com Disclosures for the point that disclosures belong in each and every such ad. Placement also matters: the FTC says a disclosure in a TikTok text description is very unlikely to be clear and conspicuous because the description is in small print, doesn't stand out, and often doesn't contrast against the video.

LabelingLegal test

.com Disclosures

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

".com Disclosures" is used in more than one setting, and its meaning depends on the context. In consumer protection, it means the FTC's guidance on how to make the disclosures that keep a digital ad from being misleading clear and conspicuous, so that consumers notice and understand them Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C) The FTC reissued the guidance in 2013 as .com Disclosures: How to Make Effective Disclosures in Digital Advertising, updating a 2000 staff paper. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)

Key legal rules

This is guidance rather than a rule, so the points below are the main ones drawn from the FTC staff's 2000 paper, Dot Com Disclosures: Information About Online Advertising (which the 2013 guide later updated), on what separates an effective online disclosure from one that fails:

There is no specific formula for determining whether a disclosure is clear and prominent; the FTC applies a performance standard, so the disclosure must be one that consumers notice and understand. Source: Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008)
The factors for judging a disclosure are its placement in the ad and proximity to the relevant claim, its prominence, whether other parts of the ad distract attention from it, and whether its language is understandable to the intended audience. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) Advertisers must consider all of the factors and evaluate an actual disclosure in the context of the ad as a whole. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
On a web page, a disclosure is more likely to be effective if consumers view the claim and the disclosure together on the same screen. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
Disclosures that are an integral part of a claim or inseparable from it should be placed on the same page and immediately next to the claim. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C) This is particularly true for cost information or certain health and safety disclosures. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C) Under some conditions, however, a disclosure accessible by a hyperlink may be sufficiently proximate to the relevant claim. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
Disclosures must be effectively communicated to consumers before they make a purchase or incur a financial obligation. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C) Where advertising and selling are combined on a web site, that means before the consumer clicks an “order now” button or an “add to shopping cart” link. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
When consumers may need to scroll to see a disclosure, advertisers should use text or visual cues to encourage them to scroll. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C) A scroll bar on the side of a computer screen is not a sufficiently effective visual cue. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
It is the advertiser's responsibility to draw attention to the required disclosures, and disclosures that are at least as large as the advertising copy are more likely to be effective. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
Disclosures should be repeated on lengthy web sites as needed, though a disclosure need not be repeated so often that consumers would ignore it and that it would clutter the ad. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
For audio claims, use audio disclosures, in a volume and cadence sufficient for a reasonable consumer to hear and understand them. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
Advertisers should use clear language and syntax and avoid legalese or technical jargon. Source: FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)
A disclosure may only qualify or limit a claim to avoid a misleading impression, and it cannot cure a false claim; if it contradicts a material claim, it will not be sufficient to prevent the advertisement from being deceptive. Source: Letter to Parker Lichtenstein, In re TT of Longwood, Inc., d/b/a Cory Fairbanks Mazda, File No. 1523047, Docket No. C-4531 (July 2, 2015)

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

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Why these rules exist

The duty to make disclosures clear and conspicuous is the same in every medium: consumers must be able to notice, read or hear, and understand the information. Source: FTC, Advertising and Marketing on the Internet: Rules of the Road (Dec. 2000) The FTC has said the guidance applies to all advertisers regardless of whether an advertisement appears in print, on radio or TV, or on the Internet. Source: Letter to Parker Lichtenstein, In re TT of Longwood, Inc., d/b/a Cory Fairbanks Mazda, File No. 1523047, Docket No. C-4531 (July 2, 2015)

The guide exists because online pages give consumers new ways to miss a qualification. Advertisers are told to assume that consumers do not read an entire web site, just as they do not read every word on a printed page. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) That matters because a disclosure that is not seen or understood leaves the claim's impression untouched, so the guide tells advertisers where and how to place the qualification. Source: In re Intuit Inc., Opinion of the Commission (Disclosures and Other Ad Elements, § d)

The guide is not itself law. Guidance publications of this kind do not constitute binding law, and violating them does not establish a violation of the FTC Act, so the question in an enforcement case remains whether the ad is deceptive. Source: Order Denying Respondent’s Motion for Discovery Pursuant to Rule 3.36 (FTC administrative proceeding, In re Intuit Inc.)

Enforcement examples

In re Ed Loan Funding, Inc. (loan solicitations with a government-style seal)

Ed Loan Funding, Inc. d/b/a Education Loan Funding, File No. 072-3186, Closing Letter to Christine Varney, Esq. (July 7, 2008)

Ed Loan Funding's solicitation letters carried a seal that was a tree in a circle and looked very much like the insignia of the Department of Education. Source: Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008) Nowhere in the direct mail solicitation did the company disclose that it is not affiliated with the Department of Education or any other United States government agency. Source: Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008)

Outcome. FTC staff closed the investigation, and the fact that the seal had not been used in solicitations for over a year weighed in that decision. Source: Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008) The letter warned that if future solicitations let consumers take away a government affiliation, the company must clearly and prominently disclose that it is not affiliated, and it pointed to Dot Com Disclosures for the performance standard. Source: Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008)

In re Progressive Chevrolet Company and Progressive Motors, Inc. (vehicle lease advertising)

Letter from Donald S. Clark, Secretary, FTC, to Bradley T. Miller, FTC File No. 142 3133, Docket No. C-4578 (June 13, 2016)

The complaint alleges that the respondents ran a vehicle lease ad that prominently touted “ZERO DOWN” and “Nothing Down” while the fine print said the offer did not include tax, title and fees and was limited to consumers with an 800 BEACON score or higher. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016) The complaint also alleges that fewer than 20% of consumers would qualify, and that the fine print used technical jargon (BEACON score) known only to industry members. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016)

Outcome. Answering a comment on the proposed consent order, the Commission cited the .com Disclosures guidance for its advice to use clear language and syntax and to avoid legalese and technical jargon. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016) It concluded that, as alleged in the complaint, the disclaimer was insufficient to correct the deceptive net impression that consumers could lease at the advertised down payment and monthly payment amounts. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016) Part I.A of the proposed order bars the respondents from representing payment amounts or payment terms unless the representation is non-misleading and they clearly and conspicuously disclose all qualifications or restrictions, including those based on credit score. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016) The Commission then issued the Decision and Order in final form without modification. Source: FTC Letter to Commenter, In the Matter of Progressive Chevrolet Company, FTC File No. 142 3133 (June 13, 2016)

Solve America's Problems d/b/a TV Liquidator (LED signs with U.S.-origin claims)

Closing Letter to Reggie Judah, CEO of Solve America's Problem doing business as TV Liquidator (Mar. 7, 2019)

FTC staff raised concerns that TV Liquidator's marketing materials may have overstated how much of its LED sign line was made in the United States, because the signs were assembled in the USA but contained significant imported parts. Source: Closing Letter to Reggie Judah, CEO of Solve America's Problems d/b/a TV Liquidator (Mar. 7, 2019)

Outcome. Staff pointed out that a disclosure is more likely to be effective if consumers view the disclosure and the triggering claim together on the same screen. Source: Closing Letter to Reggie Judah, CEO of Solve America's Problems d/b/a TV Liquidator (Mar. 7, 2019) TV Liquidator updated its website, social media platforms, and Google Ads so its U.S.-origin claims carried appropriate qualifications everywhere they appeared. Source: Closing Letter to Reggie Judah, CEO of Solve America's Problems d/b/a TV Liquidator (Mar. 7, 2019) Based on those actions and other factors, staff decided not to pursue the investigation any further. Source: Closing Letter to Reggie Judah, CEO of Solve America's Problems d/b/a TV Liquidator (Mar. 7, 2019)

FTC payday loan websites matter (enrolling consumers in discount clubs through a pop-up box)

Memorandum Opinion and Order Finding Liability

On the defendants' payday loan websites, a pop-up box appeared after consumers submitted their loan applications, and its text began “ATTENTION: Read below before pressing OK,” suggesting that the next step was to press “OK.” Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) The pop-up box Tyndall encountered during his first undercover buy did not disclose that the consumer's bank account would be charged for the membership fee. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)

Outcome. The defendants argued that their websites complied with the FTC's Dot Com Disclosures guidance, but the court did not agree. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) Applying the guidance's principles, the court held that the disclosures on the payday loan websites were not clear and conspicuous. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) Plain English and a legible font did not save the disclosure, because the pop-up box was confusing, distracting, and counterintuitive in its operation. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter) The FTC prevailed on Count II. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)

In re California Naturel (all-natural sunscreen)

Opinion of the Commission, By Chairwoman Edith Ramirez

California Naturel expressly advertised its Sunscreen SPF 30 as “all natural,” and it admitted that the formula was eight percent dimethicone, a synthetic material. Source: In re California Naturel, Inc., Opinion of the Commission, By Chairwoman Edith Ramirez California Naturel added a disclaimer to the bottom of the sunscreen webpage in “early 2016,” after the FTC began its investigation, and it relied on that disclaimer to oppose summary decision. Source: In re California Naturel, Inc., Opinion of the Commission, By Chairwoman Edith Ramirez

Outcome. The Commission held that a disclaimer well removed from the “all natural” claims, and not visible at all without scrolling down, did not change the net impression conveyed to consumers. Source: In re California Naturel, Inc., Opinion of the Commission, By Chairwoman Edith Ramirez The disclaimer also sat well below the “Add to Cart” button, so consumers were invited to buy before they would see it, and the Commission pointed to its guidance urging disclosures before the consumer decides to buy. Source: In re California Naturel, Inc., Opinion of the Commission, By Chairwoman Edith Ramirez The Commission found the “all natural” claim false and misleading, in violation of Sections 5 and 12 of the FTC Act. Source: In re California Naturel, Inc., Opinion of the Commission, By Chairwoman Edith Ramirez

In re Intuit Inc. (TurboTax free filing advertising)

Opinion of the Commission

In many TurboTax television and online video ads, the “simple returns” and “see details” or “see if you qualify” disclosures appeared only in small print at the bottom of the screen. Source: In re Intuit Inc., Docket No. 9408, Opinion of the Commission On the TurboTax website, Intuit qualified its prominent “free” messages with hyperlinks, pop-ups, and tiny-font boilerplate. Source: In re Intuit Inc., Docket No. 9408, Opinion of the Commission

Outcome. The Commission held that disclosures cannot change the net impression of an ad if they are not clear and readily visible. Source: In re Intuit Inc., Docket No. 9408, Opinion of the Commission It also found the wording itself inadequate, because a “simple tax returns only” disclosure is anything but clear and unambiguous. Source: In re Intuit Inc., Opinion of the Commission (Disclosures and Other Ad Elements, § d) Disclosures on the website did not rescue the ads, because customers should not be told by an ad that they will receive a free product if they go to a website, only to learn there that it is not free for them. Source: In re Intuit Inc., Docket No. 9408, Opinion of the Commission The Commission concluded that a cease-and-desist order was essential. Source: In re Intuit Inc., Opinion of the Commission (Remedy, § A)

Exposure

A business whose online disclosures fall short could face enforcement actions or civil lawsuits. Source: FTC, Advertising and Marketing on the Internet: Rules of the Road (Dec. 2000) In the payday loan matter, the court held that the defendants violated § 5(a) of the FTC Act by failing to adequately disclose that consumers' bank account information would be used to charge them for unrelated products. Source: Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)

In the Intuit matter, the Commission found Intuit's advertising campaign deceptive and widespread and concluded that a cease-and-desist order was essential. Source: In re Intuit Inc., Opinion of the Commission (Remedy, § A) The order also includes fencing-in relief that adds disclosure requirements, so that the respondent does not bypass it, and it terminates in twenty years. Source: In re Intuit Inc., Docket No. 9408, Opinion of the Commission The FTC is not authorized to obtain monetary relief in that administrative proceeding. Source: Order Denying Respondent’s Motion for Discovery Pursuant to Rule 3.36 (FTC administrative proceeding, In re Intuit Inc.) Complaint Counsel noted, however, that once a cease and desist order is entered the Commission may then seek “the refund of money” and other relief for additional harmed consumers, citing 15 U.S.C. § 57b(a) and (b). Source: Complaint Counsel's Pretrial Brief (In re Intuit Inc.), § E

Violating a final order brings civil penalties. In the Cory Fairbanks Mazda matter, where a commenter complained of large-print prices disclaimed in fine print, the Commission told the commenter that the dealership would be subject to its final order for twenty years and liable for civil penalties of up to $16,000 per violation should it violate that order, under Section 5(l) of the FTC Act, 15 U.S.C. § 45(l). Source: Letter to Parker Lichtenstein, In re TT of Longwood, Inc., d/b/a Cory Fairbanks Mazda, File No. 1523047, Docket No. C-4531 (July 2, 2015)

FAQs

1.Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim. FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)See also Advertising and Marketing on the Internet: Rules of the Road (Federal Trade Commission—December 2000). FTC, Advertising and Marketing on the Internet: Rules of the Road (Dec. 2000)
2.Memorandum Opinion and Order Finding Liability [PDF – 42 pages]. Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)See also Memorandum Opinion and Order Finding Liability [PDF – 42 pages]. Memorandum Opinion and Order Finding Liability (FTC payday loan websites matter)See also Advertising and Marketing on the Internet: Rules of the Road (Federal Trade Commission—December 2000). FTC, Advertising and Marketing on the Internet: Rules of the Road (Dec. 2000)
3.Ed Loan Funding, Inc. d/b/a Education Loan Funding, File No. 072 3186- Closing Letter to Christine Varney, Esq., Counsel for Ed Loan Funding. Ed Loan Funding, Inc. d/b/a Education Loan Funding, FTC Matter No. 072-3186, Closing Letter (July 7, 2008)See also Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim. FTC, Memorandum of Points and Authorities in Support of FTC’s Motion to Dismiss Defendant Gugliuzza’s Counterclaim (reproducing Dot Com Disclosures: Information About Online Advertising, § III.C)