Laws Apply Equally to Internet Sales, Advertising

FRAMINGHAM (07/31/2000) - Although the numbers of companies advertising and consumers shopping on the Web are soaring, cyberspace isn't the Wild West some fear it to be. In the excitement and rush to sell and buy online, consum-ers and businesses should remember that the same consumer protection laws that have applied to commercial activities in other media apply also to the Web.

The U.S. Federal Trade Commission (FTC) recently issued guidelines explaining how its consumer protection rules and guides - many developed long before dot-com became a household phrase - apply to advertising and sales on the Internet.

In the past few years, the FTC has filed more than 100 Internet-related law-enforcement actions, halting illegal schemes, freezing more than US$65 million in pending cases and returning more than $20 million to consumers. The FTC has stopped consumer injury in Internet scams worth more than $250 million in annual sales.

To reinforce the message that consumer-protection laws apply equally to e-commerce and to provide guidance on how to apply these laws, the FTC recently issued a guide, "Dot Com Disclosures: Information about Online Advertising."

It's a must-read for all who are selling and marketing online, and savvy consumers might want to keep a copy on top of their computer tables. The guide is posted at www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.html.

The basic theme of "Dot Com Disclosures" is familiar: Disclosures required to prevent an ad from being misleading must be clear and conspicuous. The guide details the steps advertisers can take to ensure that they pass this test.

Clearly, disclosures that consist of legal jargon in tiny print that appear for a few seconds won't cut it. The guide offers examples. Here's what advertisers can expect to be told:

-- Place disclosures near - and, when possible, on - the same screen as the claims they qualify.

-- Use text or visual cues to encourage consumers to scroll down a Web page when it's necessary to view a disclosure.

-- Display disclosures prior to a purchase, but recognize that placement limited to only the order page may not always work.

-- Review the entire ad to ensure that other elements - test, graphics, hyperlinks or sound - don't distract attention from the disclosure.

-- Repeat disclosures on lengthy Web sites and when repeating claims, as needed.

-- Display disclosures for a sufficient length of time for consumers to notice, read and understand them.

-- Use clear language and syntax so that consumers understand the disclosures.

Details about hyperlinking, banner ads, color, graphics, multimedia messages and more are spelled out to guide online marketing practices.

"Dot Com Disclosures" doesn't establish new rules but reflects the FTC's adaptation of basic consumer-protection laws to the uniqueness of Internet sales. This guide should prove an indispensable aid to online businesses in developing advertising practices that comply with existing consumer-protection laws.

Barbara Anthony is the regional director for the FTC's Northeast Region, based in New York. Thomas Cohn is an assistant regional director for the FTC's Northeast Region, based in New York.

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