Federal law prohibits "unfair or deceptive acts or practices" and broadly covers advertising claims and marketing and promotional activities, whatever medium in which they appear. Accordingly, the Federal Trade Commission ("FTC") exercises a role in protecting consumers from unfair or deceptive trade practices in online advertising, marketing, and sales.  Earlier this year, the FTC published guidelines for making clear and conspicuous online disclosures in an effort to avoid deceptive trade practices that may result in FTC scrutiny.

Like advertisements in any other medium, online advertising must be truthful and supported by evidence. Such advertisements cannot be misleading or unfair.  If a disclosure is necessary to prevent an online advertisement from being misleading or unfair, the disclosure should be:  (1) placed in close proximity to the advertising claim to which it relates; (2) prominent and unavoidable; (3) understandable to the intended audience; and (4) displayed prior to a consumer's purchase.

The FTC suggests that a short disclaimer should be incorporated into the text of the subject claim, when possible, longer disclosures may be made on the same page and next to the subject claim.  If the details of the disclosure are too complex to incorporate into the claim or placed next to it, the FTC suggests that those details may be communicated using a huperlink.  In those circumstances, the hyperlink "should be clearly labeled to communicate the specific nature of the information to which it leads."  

In evaluating the effectiveness of a hyperlink disclosure, the FTC considers:  (1) "the labeling or description of the hyperlink;" (2) "consistency in the use of hyperlink styles;" (3) "the placement and prominence of the hyperlink on the webpage or screen;" and (4) "the handling of the disclosure on the click-through page or screeen."  The FTC advises a website operator to make hypelink disclosures obvious, so that consumers understand that they can click the hyperlink to get additional information.

The FTC's March 2013 guide, ".com Disclosures:  How to Make Effective Disclosures in Digital Advertising," has additional information and examples.