Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
7NativeAdvertisingContinuedfromPage1principlesthatwouldlikelybeappliedtodeterminewhichsideofthatlineaparticularnativeadvertisingschemewouldfallonand2providesomepracticepointersforthoseinterestedinbothengaginginna-tiveadvertisingandstayingonthelegalsideoftheline.NativeAdvertisingAndTheRiskOfConsumerDeceptionInherentinnativeadvertisingsgoalofseamlesslyintegratingsponsoredandnon-sponsoredcontentistheveryrealpotentialtoconfuseconsumersinvio-lationoftheFederalTradeCommissionFTCActsprohibitionagainstdeceptiveactsorpractic-esinoraffectingcommerce.2TheinherenttensionbetweennativeadvertisingsgoalandtheFTCActsprohibitionbegsthequestiontowhatdegreemustanonlineadvertisementbedifferentiatedfromedi-torialornon-sponsoredcontenttoavoidunlawfullydeceivingconsumersInotherwordshowclearlymustthetruenatureofanativeadvertisementbedisclosedtotheonlineconsumerThroughtheyearstheFTChasissuednumerousguidelinesandpolicystatementsrequiringadvertis-ersandorpublisherstomakecertaindisclosurestoconsumerstopreventdeception.TheFTChasnothoweverissueddefinitivecomprehensiveguide-linesspecifictonativeadvertisements.Thusdivin-ingthelinebetweenlegalandillegalnativeadver-tisingpracticesrequiresananalysisoftheFTCsgenerallyapplicableprinciplesonconsumerdecep-tionaswellasthelimitedbutgrowingbodyofstatementsoractionsthattheFTChasmadeortak-eninthenativeadvertisingcontext.In1983theFTCarticulatedthegeneralruleforde-terminingwhetheranadvertisementisdeceptiveIftheadvertisementcontainsarepresentationomissionorpracticethatislikelytomisleadaconsumeractingreasonablyunderthecircum-stancesandIftherepresentationomissionorpracticeismaterialthatislikelytoaffecttheconsum-ersconductordecisionwithregardtoaprod-uctorservice.3Whileadvertisinghascertainlyevolvedsincetheearly1980sthesebedrockprinciplesfordetermin-ingdeceptionremainintactandprovidetheframe-workinwhichtheFTCActsprohibitiononcon-sumerdeceptionshouldbeinterpretedandapplied.InmorerecentyearstheFTChasencounteredsitu-ationsrequiringittooratleastprovidingapotentialcontextinwhichitcouldapplytheseprinciplestocertainaspectsofnativeadvertising.Forexamplein2010theFTCchargedapublicrelationsfirmwithengagingindeceptiveadvertisingbecauseitprovidedmisleadingonlineendorsementsofgamingappsdevelopedbyitsclient.Theallegedlydecep-tiveact-at-issuewasthePRfirmspracticeofusingitsemployeestopostfavorablereviewsofaclientsproductsinvariousonlineforawithoutdisclosingthatthereviewscamefrompaidemployeesworkingonbehalfofthedevelopers.Inotherwordsthere-viewswerepaidadvertisementsmasqueradingaseditorialnon-sponsoredcontent.TheFTCandthePRfirmsettledthecasepriortotheissuanceofaformalFTCdecision.NeverthelessthefactthattheFTCbroughttheactionindicatesattheveryleastthatsponsoredcontentwithoutanydisclosurewhat-soeverviolatestheFTCAct.4Whileclearlythetruenatureofsponsoredcontentmustbedisclosedthequestionstillremainsastohowclearorconspicuousadisclosuremustbetosuffice.InMarch2013theFTCprovidedfurtherguidancebyupdatingitsadvertisingdisclosureguidelinesformobileandonlineadvertisers.5Whiletheseupdatedguidelinesarenotspecifictonativeadvertisementstheydoprovidesomevaluableinsight.AsaninitialmattertheFTCclarifiedthatadvertisershavetheflexibilitytobecreativeindesigningtheiradsaslongasnecessaryinformationiscommunicatedef-fectivelyandtheoverallmessageconveyedtocon-sumersisnotmisleading.6TheFTCthenamongotherthingsprovidedcasestudiesandevaluatedwhetherparticularexamplesofdisclosuresandonlineadvertisementswerelikelytorunafouloftheFTCActsprohibitionondeceptiveadvertising.Forexampleperhapsharkeningbacktothe2010actionContinuedonPage10