FTC Issues Enforcement Policy Statement Addressing “Native” Advertising and Deceptively Formatted Advertisements

The Federal Trade Commission issued an enforcement policy statement explaining how established consumer protection principles apply to different advertising formats, including “native” ads that look like surrounding non-advertising content. In the Enforcement Policy Statement on Deceptively Formatted Advertisements, the FTC lays out the general principles the Commission considers in determining whether any particular ad format is deceptive and violates the FTC Act.

The policy statement affirms the long-standing consumer protection principle that advertisements and promotional messages that promote the benefits and attributes of goods and services should be identifiable as advertising to consumers. The policy statement explains that an ad’s format is deceptive if it materially misleads consumers about the ad’s commercial nature, including through any implied or express representation that it comes from a party other than the sponsoring advertiser. If the source of advertising content is clear, consumers can make informed decisions about whether to interact with the advertising and the weight to give the information conveyed in the ad. Also released is “Native Advertising: A Guide for Business” to help companies understand, and comply with, the policy statement in the context of native advertising. The business guidance gives examples of when disclosures are necessary to prevent deception and FTC staff guidance on how to make clear and prominent disclosures within the format of native ads.