Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC issues policy, guidance on ‘native’ advertising, deceptively formatted ads, (Dec 22, 2015)

By Michael Menzhuber, J.D., LL.M.

The FTC has issued an enforcement policy statement, explaining how established consumer protection principles apply to different advertising formats, including “native” ads that look like surrounding non-advertising content. In the statement, the FTC sets forth the general principles that it considers in determining whether any particular ad format is deceptive and violates the FTC Act.

The policy statement, entitled “Enforcement Policy Statement on Deceptively Formatted Advertisements,” affirms the long-standing consumer protection principle that advertisements and promotional messages that promote the benefits and attributes of goods and services should be identifiable as advertising to consumers. It explains that an ad’s format is deceptive if it materially misleads consumers about the ad’s commercial nature, including through any implied or express representation that it comes from a party other than the sponsoring advertiser.

The FTC has also released “Native Advertising: A Guide for Business.” This guidance, which helps companies understand and comply with the policy statement in the context of “native” advertising, provides: (1) examples of when disclosures are necessary to prevent deception; and (2) FTC staff guidance on how to make clear and prominent disclosures within the format of native ads.

The policy statement and business guidance are, in part, the result of: (1) the FTC staff’s analysis of information collected at a December 2013 workshop entitled “Blurred Lines: Advertisements or Editorial?”; (2) the FTC staff’s monitoring of how “native” advertising is used; and (3) relevant consumer research over the past two years.

News: Advertising ConsumerProtection FederalTradeCommissionNews