[Federal Register Volume 64, Number 56 (Wednesday, March 24, 1999)]
[Proposed Rules]
[Pages 14156-14158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7125]
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FEDERAL TRADE COMMISSION
16 CFR Ch. I
Announcement of Date of Public Workshop on the Interpretation of
Rules and Guides for Electronic Media, Procedure for Requesting to
Participate, and Request for Submission of Advertisements
AGENCY: Federal Trade Commission.
ACTION: Announcement of date of public workshop on the interpretation
of Federal Trade Commission rules and guides for electronic media,
procedures for requesting to participate, and request for submission of
advertisements for use at the workshop.
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SUMMARY: On May 6, 1998, the Federal Trade Commission (``Commission'')
published a Federal Register Notice seeking public comments on its
proposal to issue a policy statement regarding the applicability of its
rules and guides to electronic media, such as e-mail, CD-ROMs, and the
Internet. The Commission also solicited comment regarding interest in
participating in or attending a workshop to discuss the issues raised
in the Federal Register Notice. As a part of the review of these
issues, the Commission has scheduled the workshop for May 14, 1999 at
its headquarters at 600 Pennsylvania Ave., NW, Washington, DC. Today's
Federal Register Notice discusses the topics to be discussed at the
workshop and the procedures to be followed by those who wish to
participate in the workshop. The Commission also solicits the
submission of mock advertisements to be used at the workshop to discuss
some of the issues raised in its Notice and in the comments.
DATES: Requests to participate at the workshop must be submitted by
April 12, 1999, and any examples of advertisements to be used at the
workshop must be submitted by April 19, 1999.
[[Page 14157]]
ADDRESSES: All submissions should be sent either to the Office of the
Secretary, Federal Trade Commission, Room 159, 600 Pennsylvania Avenue,
NW, Washington, DC 20580, or by e-mail to elecmedia@ftc.gov>. The
submissions should include the submitter's name, address, telephone
number and, if available, FAX number and e-mail address. All
submissions should be captioned ``Interpretation of Rules and Guides
for Electronic Media--FTC File No. P974102.''
FOR FURTHER INFORMATION CONTACT: Laura J. DeMartino, Attorney, Federal
Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580,
telephone (202) 326-3030, e-mail <>[email protected]>.
SUPPLEMENTARY INFORMATION:
I. Background
In a May 6, 1998 Federal Register Notice, the Federal Trade
Commission (``Commission'') solicited public comment on its proposal to
issue a policy statement regarding the applicability of its consumer
protection rules and guides to newer forms of electronic media, such as
e-mail, CD-ROMs, and the Internet (hereinafter collectively referred to
as ``electronic media''). The Notice discussed the Commission's
proposals with respect to: (1) The extent to which the Commission's
rules and guides apply to representations disseminated through, and
activities occurring on, electronic media; (2) how businesses may
comply with the Commission's rules and guides in advertising products
and services and conducting commercial activities using electronic
media; (3) interpretations of certain terms in light of the use of
electronic media and how electronic media could be used to comply with
the affirmative disclosure requirements of the rules and guides; and
(4) how disclosures required or recommended by the Commission's rules
and guides should be made in electronic media
advertisements.1 The purpose of the Notice, and any future
policy statement by the Commission, was to reduce any uncertainty
regarding whether the rules and guides applied to activities on the
Internet and provide guidance to industry in complying with the rules
and guides in electronic media. The Commission also solicited comment
regarding interest in a workshop to discuss the issues raised in the
Notice.
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\1\ The May 6, 1998 Federal Register Notice specifies the rules
and guides that are being considered in this proceeding. See 63 FR
24998 (May 6, 1998). The Commission is not addressing regulations
issued by the Federal Reserve Board and enforced by the Commission:
Regulation B, 12 CFR part 202; Regulation E, 12 CFR part 205;
Regulation M, 12 CFR part 213; Regulation Z, 12 CFR part 226.
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The Commission received 62 comments in response to the
Notice.2 A number of comments advised the Commission to
proceed carefully in developing guidance for electronic media
advertising, to avoid inadvertently burdening business or stifling new
technology. Many comments expressed interest in participating in a
public workshop to more fully discuss the issues related to the
applicability of the rules and guides to electronic media. The
Commission has concluded that a workshop will afford Commission staff
and interested parties an opportunity to explore a number of the issues
raised in the Notice and the comments. The workshop would not be
intended to achieve a consensus among participants, or between
participants and Commission staff, with regard to any issue raised in
the Notice. The Commission will consider the views and suggestions made
during the workshop, in addition to the written comments received, in
formulating any future guidance regarding the application of its rules
and guides to electronic media.
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\2\ The comments are available for viewing at the Commission's
headquarters, 600 Pennsylvania Ave., NW, Room 130, Washington, DC
20580. The comments also are available on the Commission's website
at http://www.ftc.gov/bcp/rulemaking/elecmedia/index.htm>.
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II. Date, Time and Location of Workshop
The workshop is scheduled to be held in the FTC headquarters
building, 600 Pennsylvania Avenue, NW, Washington, DC, on May 14, 1999.
III. Workshop Sessions
The workshop will be divided into two sessions, focusing on the
issues that generated significant public comment and that the
Commission believes will be useful to discuss further with
participants. Session One will discuss how the Commission should
evaluate whether disclosures required or recommended by the rules and
guides are made clearly and conspicuously in electronic media
advertisements. Session Two will discuss the interpretation of the
terms ``written,'' ``writing'' and ``printed,'' as used in the rules
and guides, in light of the use of electronic media. This session will
also discuss how electronic media may be used to comply with
requirements to provide information to consumers ``in writing'' or by
``mail.'' 3 An agenda of the workshop will be provided to
all interested parties as soon as practicable.
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\3\ Other issues relating to electronic media generally, such as
privacy or electronic payment technologies, will not be addressed in
this workshop.
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IV. Interpretation of the Term ``Direct Mail''
The Commission has determined not to discuss at the workshop the
use of the term ``direct mail'' in the rules and guides. The Commission
proposed interpreting this term to include communications that are
individually addressed and capable of being received privately (e.g.,
e-mail). Many written comments addressing this issue concur that e-mail
is a form of direct mail, and additional workshop discussion on the
issue is unlikely to contribute significantly to the record.
The comments, however, offered differing opinions and rationales as
to whether targeted Internet advertising is properly considered a form
of direct mail or other media advertising. The use of targeted
advertising on the Internet and consumers' perceptions of it are still
evolving and there is likely to be considerable variation in the extent
to which such advertising is personalized to the individual consumer or
viewer. Thus, the Commission has concluded it is premature, at this
point, to consider defining whether or not targeted Internet
advertising, in all of its varying forms, is direct mail.
V. Interpretation of ``Clear and Conspicuous'' Disclosures
The Notice solicited comment on how the Commission should evaluate
whether disclosures required or recommended by the rules and guides are
clear and conspicuous in electronic media advertisements. In
determining whether a disclosure is clear and conspicuous, the
Commission evaluates the nature of the advertisement and the claim and
generally considers a number of factors. Because of the unique nature
of electronic media advertisements, the Notice solicited comment on how
these factors should be applied in evaluating such ads. The purpose of
this proceeding is not to develop specific rules as to how all
disclosures in electronic media advertisements should be made. Instead,
this proceeding will inform the Commission's analysis of disclosures in
electronic media advertisements and may provide a basis for future
guidance for businesses in making online disclosures effectively.
The Notice, and the comments received in response to it, raise
challenging issues regarding whether disclosures in electronic media
advertisements are displayed clearly
[[Page 14158]]
and conspicuously. Some of these issues include:
(1) The disclosure's proximity to the claim being modified and its
placement in the context of the advertisement, including
(a) Whether the disclosure should be placed on the same screen as
the claim it modifies,
(b) The difficulties faced by advertisers in placing disclosures on
the same screen,
(c) Whether disclosures accessible by a hyperlink are effective and
the nature of the hyperlink used;
(2) The disclosure's prominence;
(3) Whether factors in other parts of the advertisement distract
consumers' attention away from the disclosure;
(4) Whether the disclosure should be repeated in a lengthy
advertisement;
(5) Whether the disclosure should be made in the same mode (visual,
audio) as the claim; and
(6) Whether a website contains features that ``block'' a consumer
from returning to a page with a disclosure, after the consumer links to
another page on the site.
VI. Request for Submission of Advertisements
To encourage a productive discussion of these issues at a workshop,
Commission staff will request participants to discuss mock
advertisements that staff has produced. The Commission also is
providing interested parties with an opportunity to submit mock
advertisements that may be useful for discussion at the workshop. The
advertisements should contain disclosures that are required or advised
by the rules and guides and should highlight the issues faced in
evaluating whether the disclosures are clear and conspicuous. The
advertisement should not feature real products or services and it
should not identify the individual or company who created it. Parties
interested in creating advertisements should first contact Laura
DeMartino, 202/326-3030, to discuss their proposed advertisement.
If the number of advertisements submitted is so large that it would
be impossible to discuss all of them at the workshop, Commission staff
will choose those advertisements that best exemplify the issues to be
discussed. All examples should be submitted by April 19, 1999. The
advertisements should be submitted in the format in which they should
be displayed at a workshop (e.g., HTML format). Prior to the workshop,
Commission staff will make available the mock advertisements that will
be discussed.
The Commission also encourages interested parties to submit the
results of any research or studies regarding consumer behavior or
perceptions of electronic media advertisements for discussion at the
workshop.
VII. Request to Participate
To be eligible to participate in the workshop, you must file a
request to participate by April 12, 1999. The request should specify
the workshop sessions in which you are interested. Any persons who wish
to participate in the workshop, but did not submit a written comment,
should submit a short statement of their views. If the number of
parties who request to participate in the workshop is so large that
including all requesters would inhibit effective discussion among the
participants, Commission staff will select as participants a limited
number of parties to represent the interests. Selection will be based
on the following criteria:
(1) The party submitted a request to participate by April 12, 1999.
(2) The party's participation would promote the representation of a
balance of interests at the workshop.
(3) The party's participation would promote the consideration and
discussion of the issues presented in the workshop.
(4) The party has expertise in issues raised in the workshop.
(5) The party adequately reflects the view of the affected
interest(s) which it purports to represent.
If it is necessary to limit the number of participants, those who
requested to participate but were not selected will be afforded an
opportunity, if at all possible, to present statements during a limited
time period at the end of one or more sessions. The time allotted for
these statements will be based on the amount of time necessary for
discussion of the issues by the selected parties, and on the number of
persons who wish to make statements.
Requesters will be notified as soon as possible after April 12,
1999 if they have been selected to participate.
By direction of the Commission, Commissioner Swindle not
participating for medical reasons.
Donald S. Clark,
Secretary.
[FR Doc. 99-7125 Filed 3-23-99; 8:45 am]
BILLING CODE 6750-01-P
