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The FTC says disclosures not directly affecting the price (or certain health and safety disclosures) can be placed in hyper- linked terms and conditions or in plain text in the promotion itself. If a business links its promotional terms and conditions, then the link should be placed near the promotion. The FTC cautions against burying hyperlinked terms and conditions at the bottom of the webpage next to general links like “privacy policy,” or “copyright information,” as customers rarely look at this infor- mation. The hyperlink should be labeled in a way that conveys to the reader the importance of the link and relate to the informa- tion to which it links (e.g., “promotional terms and conditions apply” placed very close to “10-percent off sale”). General descrip- tors such as “details here,” “disclaimer,” or “more information” should not be used.
The FTC advises that terms and conditions should be compat- ible across different electronic devices. The promotion’s terms and conditions must be visible and accessible regardless of the device on which they are accessed, including desktops, laptops, tablets, and smartphones. The FTC says that plain text is the best way to ensure customers can access the relevant information from any device. Terms and conditions should not be placed in Adobe Flash Player because Adobe is not compatible with smart phones. Similarly, pop-up windows with important information should not be used, as many users have ad-blockers or will close out of the pop-up without reading it.
“Up To” Discounts
Advertising “up to 40-percent off” or “save up to $300” during a promotion has the potential to be misleading, as well. The FTC expects advertisers who make these offers to demonstrate that all or almost all customers are likely to achieve the maximum “up to” results. Otherwise, the business must disclose the specific circumstances clearly and prominently under which customers are likely to achieve the maximum “up to” results.
When using an “up to” promotion, disclose the price range (i.e., the highest and lowest prices or the greatest and least
reduction in prices) and convey to the customer how he or she can obtain the maximum discount promised (e.g., “maximum discount earned by purchasing products A, B, and C in the same order”).
Email Advertising Campaigns
An email advertising campaign must comply with the CAN-SPAM Act (“CAN-SPAM”). CAN-SPAM is a federal law governing commercial email. Email is commercial if it has the primary purpose of advertising or promoting a product or service. CAN-SPAM requires truthful, non-misleading email and a simple opt-out procedure.
CAN-SPAM prevents a business from sending untruthful or misleading commercial email. Untruthful or misleading prac- tices include using subject lines that do not reflect the email’s content or disguising the person or business that sent the message. Commercial email must also include the physical mailing address of the business sending the message. In addition, if it is not clear from the email’s content that the message was sent for commercial purposes, then the message must be identified as an advertisement.
CAN-SPAM also requires that commercial email contain a clear and conspicuous explanation as to how the recipient can opt out of receiving future messages. A business must allow the recip- ient to opt out by replying to the message or visiting a link to a single, separate website where the recipient can opt out. The busi- ness cannot redirect the customer to multiple websites, charge an opt-out fee, or require the customer to provide any personal infor- mation except his or her email address. Opt-out requests must be honored within 10 business days. Once the customer completes the opt-out procedure, the business cannot sell or transfer the customer’s email address.
Don’t forget about State Law Requirements
Every state has laws against false advertising. State law prohibits much of the same conduct as the FTC regulations, but states provide additional remedies for the injured party. Indeed, most states provide competitors and consumers a private right of action for false and misleading advertising. States also allow stat- utory penalties (ranging from $50 to over $2,500) for each illegal advertisement, which can grow exponentially based on how easy it is to distribute electronic advertisements.
Maintaining an online presence is crucial to a business’ long- term success. Before engaging in the online marketplace, however, a business must ensure its online marketing efforts comply with all applicable laws and regulations.
Prickett is a litigation associate at Faruki PLL and works in the firm’s Cincinnati office. His practice focuses on complex commercial disputes, employment matters, and class action defense. Prickett joined the CBA in December 2020.
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CBA REPORT | September/October l 13
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