The Bottom Line
- The FTC has made clear that some common online advertising methods, such as bidding on a competitor’s trademark in search engine marketing, may not always be contracted away, especially when they result in restricting consumers’ access to competitive pricing information.
- Parties to intellectual property and online advertising disputes often enter into confidential settlements to resolve their claims. However, when considering such agreements, parties must now also consider the potential impact upon consumers.
The Children’s Advertising Review Unit (CARU) recently released its revised self-regulatory guidelines for responsible advertising to children (the Revised Guidelines). The Revised Guidelines go into effect on January 1, 2022 and address the new media formats directed to children, including digital media, influencer marketing, apps, in-game advertising and social media. Despite these changes, the Guidelines’ core principles, including ensuring advertising directed to children is truthful and not misleading, remain the same.
Key changes include:
- Age of a Child: Applying the Guidelines to children under the age of 13, while the previous Guidelines applied to children under the age of 12.
- Primarily Directed to Children: Replacing the television-centric factors for determining whether an ad is “primarily directed to children” with the following that more aptly reflect the digital advertising environment:
- The subject matter and content of an advertisement;
- Use of child-oriented animated characters;
- Child-oriented activities or incentives;
- Age of models;
- Presence of child celebrities or celebrities who appeal to children;
- Language or other characteristics;
- Competent and reliable empirical evidence regarding audience composition; and
- Evidence regarding the intended audience.
- Diversity and Inclusion: Encouraging advertisers to create content that is welcoming to children of all races, religions, cultures, genders, sexual orientations, and physical and cognitive abilities and prohibiting advertising that encourages negative social stereotyping, prejudice or discrimination.
- Blurring: Ensuring that advertisements integrated into the content of a game or activity on digital media are easily identifiable as advertising in light of children’s limited sophistication, experience and maturity.
- Endorsers and Influencers: Emphasizing the importance of having clear and conspicuous disclosures when influencers are being paid or receive free product in return for promoting products or services in language that children can easily understand.
- In-App and In-Game Advertising and Purchases: Prohibiting unfair or manipulative advertising in in-app and in-game advertising and purchases, including with respect to deceptive door openers, social pressure or validation to encourage ad viewing or purchases, and ensuring that methods to dismiss or exit an ad are clear and conspicuous to children.
- Material Disclosures: Clarifying the clear and conspicuous disclosure requirement in the context of different advertising formats, including when advertisers should make such disclosures in both audio and video form and when advertisers should repeat disclosures so that children are more likely to receive their messages.
The Revised Guidelines will continue to evolve, including through new CARU FAQs.