FTC Grapples with Regulation of New Media in New Policy Statement Addressing Native Advertising
On December 22, 2015, the Federal Trade Commission (FTC) issued a new enforcement policy statement explaining how established consumer protection principles apply to “native” advertising. Native advertising refers to the use of online advertisements that look like surrounding non-advertising content. In the FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements, the FTC explained that native advertisements must be recognizable as advertising to consumers. The policy statement stated that an advertisement's format is deceptive if it materially misleads consumers about the advertisement's commercial nature, including through any implied or express representation that it comes from a party other than the sponsoring advertiser. The FTC also issued new guidance materials to help companies comply with the new policy statement.
The FTC has recently been wrestling with the issue of how to apply traditional consumer protection principles to new forms of media. Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, forecast the policy statement released yesterday earlier this year at a talk sponsored by the Word of Mouth Marketing Association and Holland & Knight, LLP on October 6, 2015.
Read the FTC press release.
Read Jessica Rich's speech: FTC 2016 – Meeting the Challenges of the Digital Revolution.