September 13, 2011
Many a person has made the assumption that you can get away with more online than in the “real world.” However the Federal Trade Commission is there to prove them wrong. In this paper we will look at the history of FTC, some of the important roles they play in cracking down on online advertising regulations and we will look at a current issue in regards to false advertising claims to show how FTC really does business.
The Federal Trade Commission
The Federal Trade Commission (FTC) was established in 1914 by the Federal Trade Commission ACT. Its primary mission is to protect consumers and eliminated anti-competitive business acts, also known as coercive monopoly. Over the years, congress has passed multiple laws giving the FTC the power and authority to police companies and offer a wide variety of protection for consumers. The FTC has been involved in regulating countless internet activities throughout the years.
Since the mid 1990’s one technique the FTC focuses on is online behavioral advertising (OBA). In December of 2007, four online marketing groups committed to develop a set of privacy principles for online advertising. These groups included the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau all to support the FTC’s goal of a self-regulatory program. These principles were laid out and included transparency and consumer control, reasonable security and limited data retention, consumer consent for major changes to existing privacy policies and affirmative consumer consent for using sensitive data behavioral advertising. Under each guide line the FTC continues to expect that web sites provide clear notice about behavioral advertising, as well as a way for consumers to choose whether or not to have their information collected. The FTC has created workshops, developed reports to recommend not only federal regulation but also industry self-regulation of OBA. Do Not Track, a proposal developed by the FTC in December of 2010 was establishing to allow consumers the option to opt-out. Opt-out, according to our book refers to several methods by which individuals can avoid receiving unsolicited product or service information. This ability is usually associated with direct marketing campaigns such as telemarketing, e-mail marketing, or direct mail. The FTC apperceive the Do Not Track method would be the most efficient method of administering a compatible alternative for online behavioral advertising, because it placed settings similar to cookies on consumer’s browsers and expressed those setting to various sites allowing the consumer to visit sites without their information being tracked. The Do Not Track method is more suitable to the existing browser based cookie opt-outs because it is clearer, easy to locate and capable of conveying the users choice to opt out of tracking directly to websites.
The FTC works hard to drive out fraud and deceit that might diminish consumer credence in the marketplace. When it comes to the internet, the FTC jurisdiction protects the same laws that apply to the real world as they do to the online world. For instance, the FTC forbiddance on unfair or dishonest acts or practices, covers advertising claims, marketing and promotional activities. This act is not confined to any particular medium and it without a doubt applies to online activities. The same regulation such as, being truthful and not misleading, advertisers must have evidence to back up their clams, cannot be unfair, and must disclose everything in a clear and conspicuous way.
One of the most important facets of online advertising is disclosure. When observing online ads, advertisers must assume that site visitors will not read the entire site. Therefore, it is very important for advertisers to draw understanding and