NOTE: This summary was prepared by the staff of the Federal Trade Commission’s Division of Advertising Practices and does not reflect the opinions of the Commission or its bureaus or offices. For more information about the FTC, visit www.ftc.gov.
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Advertisements often contain fine-print footnotes or video superscripts that attempt to disclaim, limit, or explain claims made elsewhere in the ad. Advertisers cannot use fine print to contradict other statements in an ad or to clear up misimpressions the ad would otherwise leave. FTC Deception Policy Statement, appended to Cliffdale Associates, Inc.,103 F.T.C. 110, 180-81 (1984). Similarly, accurate information in a footnote or dense block of text will likely not remedy a deceptive representation conveyed by a headline or other prominent selling message because reasonable consumers may not read the footnote. See id. at 180; Gateway Corp., File No. 992-3276 (proposed consent agreement issued for public comment May 16, 2001) (challenging ads for "free" or flat-fee internet services that disclosed in a fine-print footnote that many consumers would incur significant additional telephone charges).
To be effective, Commission orders require such disclosures to be clear and conspicuous. E.g., Thompson Medical Co., 104 F.T.C. 648, 842-43 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987) (requiring simultaneous audio disclosure for video superscripts for certain claims). See also United States v. Bayer Corp., No. CV 00-132 (NHP) (D.N.J. Jan. 11, 2000) (consent decree) (requiring audio and visual disclosure of information when ads make certain representations about the benefits of regular aspirin use in the prevention of heart attacks).
In evaluating the effectiveness of disclosures, the Commission considers factors such as:
- Prominence: whether the qualifying information is prominent enough for consumers to notice it and read (or hear) it;
- Presentation: whether the qualifying information is presented in easy-to-understand language that does not contradict other things said in the ad and is presented at a time when consumers’ attention is not distracted elsewhere;
- Placement: whether the qualifying information is located in a place and conveyed in a format that consumers will read (or hear); and
- Proximity: whether the qualifying information is located in close proximity to the claim being qualified.
In addition to the requirements of Section 5 of the FTC Act, other federal statutes mandate that information about certain products and services be clearly and conspicuously disclosed to consumers. See, e.g., Trade Regulation Rule Pursuant to the Telephone Disclosure and Dispute Resolution Act of 1992, 16 C.F.R. § 308; Dell Computer Corp., C-3888 (Aug. 6, 1999) (consent order) , and Micron Electronics, Inc., C-3887 (Aug. 6, 1999) (consent order) (challenging under Section 5 and the Consumer Leasing Act television, print, and Internet ads for consumer leases that placed material cost information in fine print).
Print disclosures: In print ads, the Commission frequently has found fine-print footnotes or dense blocks of text to be inadequate to modify a claim made elsewhere in the ad. Representative cases:
- Hewlett-Packard Co., File No. 002-3220, and Microsoft Corp., File No. 002-3331 (proposed consent agreements published for public comment April 4, 2001) (challenging ads for personal digital assistants that represented that products came with built-in wireless access to the Internet and e-mail while revealing in a fine-print footnote "Modem required. Sold separately.")
- Value America, Inc., C-3976 (Sept. 8, 2000) (consent order), Office Depot, Inc., C-3977 (Sept. 8, 2000) (consent order), and BUY.COM, Inc., C-3978 (Sept. 8, 2000) (consent order) (challenging promotions for low-cost computer systems that disclosed true costs of the offer and important restrictions in fine-print footnotes or headnotes)
- Häagen-Dazs Co., 119 F.T.C. 762 (1995) (consent order) (challenging effectiveness of fine-print footnote modifying "98% fat free" claim for frozen yogurt products that were not low in fat)
- Stouffer Food Corp., 118 F.T.C. 746 (1994) (Commission Decision) (holding that sodium content claims for food product were false and unsubstantiated and not cured by fine-print footnote)
- Television disclosures: Video superscripts that are difficult to understand, are superimposed over distracting backgrounds, compete with audio elements, or are placed in portions of the ad less likely to be remembered have been found to be ineffective in modifying a claim made in the main ad. Thompson Medical Co., 104 F.T.C. at 797-98. Representative cases:
- United States v. Mazda Motor of America, Inc., (C.D. Cal. Sept. 30, 1999) (consent decree) ($5.25 million total civil penalty for violations of FTC and state orders related to disclosures in car leasing advertising)
- General Motors Corp., 123 F.T.C. 241 (1997) (consent order); American Honda Motor Co., 123 F.T.C. 262 (1997) (consent order); American Isuzu Motor Co., 123 F.T.C. 275 (1997) (consent order); Mitsubishi Motor Sales of America, Inc., 123 F.T.C. 288 (1997) (consent order); Mazda Motor of America, Inc., 123 F.T.C. 312 (1997) (consent order); Chrysler Corp., C-3847 (Jan. 13, 1999) (consent order) (requiring clear and conspicuous disclosure of terms in ads for car leases, defined as "readable [or audible] and understandable to a reasonable consumer")
- Foote, Cone & Belding, Inc., 125 F.T.C. 528 (1998); Grey Advertising, Inc., 125 F.T.C. 548 (1998); Rubin Postaer and Associates, Inc., 125 F.T.C. 572 (1998); Bozell Worldwide, Inc., C-3845 (Jan. 4, 1999) (consent order) and Martin Advertising, Inc., C-3846 (Jan. 4, 1999) (consent order) (challenging agencies’ roles in advertisements containing deceptive representations of car leasing terms)
- Kraft, Inc., 114 F.T.C. at 124 (Initial Decision) (holding that complicated superscript – "one ¾ ounce slice has 70% of the calcium of five ounces of milk" – does not cure deceptive calcium content claim for cheese slices), aff’d, 970 F.2d 311 (7th Cir. 1992), cert. denied, 507 U.S. 909 (1993)
- Internet disclosures: On May 3, 2000, a staff working paper was issued examining how the Commission’s consumer protection rules and guides apply to advertising and sales on the Internet. The paper, Dot Com Disclosures: Information about Online Advertising, provides guidance to businesses about how FTC law applies to online activities with a particular focus on the clarity and conspicuousness of online disclosures.
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