Updated FTC Disclosure Law

2013 FTC Disclosure GuidelinesThe FTC has updated their guidelines and you can find the updated file here: FTC Staff Revises Online Advertising Disclosure Guidelines. From the page:

“The Federal Trade Commission today released new guidance for mobile and other online advertisers that explains how to make disclosures clear and conspicuous to avoid deception.”

Did you know that the FTC has a blog? Here is a post entitled FTC Reboots .com Disclosures: Four Key Points and One Possible Way to Bypass the Issue Altogether

Essentially they updated the guidelines to make is crystal clear that disclosures are needed no matter where the advertisement is. Here is an excellent article discussing how it applies to twitter entitled FTC Lays Down the Law on Endorsed Tweets.

FTC Initiative Do Not Track Consumers

The FTC issued an online privacy report which has been deemed the “Do Not Track” report. You can find the FTC Release Here. Here is a quote from that release:

The proposed report also suggests implementation of a “Do Not Track” mechanism – likely a persistent setting on consumers’ browsers – so consumers can choose whether to allow the collection of data regarding their online searching and browsing activities.

Maybe I am thinking too much but it seems odd that they would assume it is their decision to determine how to implement a feature in a browser. They actually say it is “likely” to be a persistent setting on consumers’ browsers, that strikes me as odd. That is like your boss saying “we have a problem and you need to fix it, so you have three choices A, B and C, and by the way I think it is likely you will choose C and as you know I can cause you harm, of course do whatever you like but I have a gut feeling you will choose C.”

I am not saying this report is not helpful and due to cases of abuse by companies online, it is welcomed. I just found that statement very interesting. You can find links to the privacy report itself on the right sidebar of the FTC Release Here.

Restore Online Shoppers Confidence Act

Bill Related to Online Sales
An interesting Bill passed, S.3386 Entitled Restore Online Shoppers’ Confidence Act, can be found here at OpenCongress which is a great site by the way. You can read the entire text of the bill at this site. There have been issues online of unscrupulous marketers doing more than just fulfilling the initial customers order. From selling the customers information without the customers consent and in some cases passing along the credit card information to make a second purchase of another item or service on behalf of the customer without their knowledge or consent. The desire of this bill is to combat those individuals head on. To better understand the bill itself read it here with the additional commentary (and funny) from attorney Mike Young.

Regulating Privacy before the Government Does

Privacy Self Regulation
Having been in online advertising since it’s infancy I have seen and dealt with online privacy issues. At one time we built a banner ad server as well as a permission based email platform in the 90’s. Also as an intellectual property attorney I have dealt with the legal issues surrounding privacy and privacy policies. This has always been a fascinating issue. In many cases the government allows an industry to either regulate itself or else they will step in and regulate it for you.

The U.S. government, through the Federal Trade Commission, has been calling for more stringent regulation of online behavioral advertising practices. A group of associations put forth a self regulatory program in 2009. The associations are: American Association of Advertising Agencies (4A’s), American Advertising Federation (AAF), Association of National Advertisers (ANA), Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB), with support from the Council of Better Business Bureaus (BBB).

There is a webinar being put on by the DMA which you an find here, to learn more.

Affiliates in Colorado It Is Time to Move

Here is more in the online taxation and affiliate issue. Originally we noted that states such as Colorado passed laws at an attempt to obtain sales tax on sales that were considered to have been originated through an affiliate in their state. Originally it was Amazon that took the first step and you can read the original article here entitled Law Dictates Behavior where Amazon’s response was to simply terminate all affiliates in Colorado from their affiliate program. Now the domino’s fall.

First it was Amazon, and today I see a smaller online retailer with an affiliate program that you may or may have heard of. Regardless I will remove their name and show you the email text here:

Dear XYZ,

Due to the recent tax laws regarding nexus involving online affiliate publishers in the state of Colorado (legislation known as HB 10-1193) we will no longer be able to accept new publishers from Colorado into our affiliate program.

Additionally, we will be immediately terminating our relationship with any publishers that were already joined. We sincerely apologize for the abrupt interruption in the program if this affected your account directly. This, unfortunately, affects our ability to continue business with loyal publishers and we understand that we are losing valuable relationships due to these new laws.

Your publisher account will be closed as of May 18, 2010, and we will no longer pay advertising fees for sales referrals after that date. All sales made prior to May 18, 2010 will be credited to you and paid out in accordance with our regular schedule on June 10, 2010. Please accept our apologies and we appreciate your understanding. Hopefully in the future, these laws will be reversed in order to keep the networks diversified and growing.

Kind Regards,

Not sure why I got it as I am not a Colorado based affiliate. However there you have it. The wheels have been set in motion and those that have sites relying on affiliate revenue within certain states may have to move. Of course that begs another question about the business with the affiliate relationship and where they are incorporated, or where their entity is considered to reside, verse where the employees or owners reside. Could it be as simple as just re-incorporating in another state and obtaining a post office box? I don’t know for sure but I feel for those that may have to either shut down their business or move their business and families to another state.