The Information Technology Industry Council (ITI) is pleased to respond to the Federal Trade Commission's (FTC or "Commission") request for public comments on its proposal to issue a policy statement regarding the applicability of its rules and guides to the Internet and other forms of electronic media. ITI commends the FTC for undertaking this inquiry, and agrees with the goal of the inquiry --as stated by the FTC-- on the need to remove uncertainty in the applicability of the FTC's traditional consumer protection rules and guides to the new electronic media.
ITI represents the leading product and service providers in the information technology industry. ITI is committed to advancing the global competitiveness of its members through policies that encourage innovation, open markets, and enable consumer choice. In 1997, our members had worldwide revenue of $420 billion and employed more than 1.2 million people in the United States.
ITI strongly supports the right of consumers to be protected from fraudulent, unfair and deceptive practices, whether online or through more traditional media. The future growth of electronic commerce rests upon consumer confidence that there is indeed a cop on the beat in cyberspace, just as there is on Main Street. ITI is therefore supportive of the FTC’s initiative to review its traditional consumer protection tools in order to ensure that consumers will have a high expectation that those protections afforded them in traditional venues will also be available to them when they undertake transactions in cyberspace.
Where we have a certain caution about these proceedings is not in the stated policy goals, but in their implementation. We agree with the Commission when it states that, "The unique features of electronic media present special challenges and opportunities..." Cyberspace is unique, and we look forward to working with the Commission in its work in translating its traditional consumer protection rules and guides to meet the "special challenges" of the on-line environment.
In general, we urge the FTC to work toward performance standards rather than design standards in translating and utilizing its traditional consumer protection tools in the new electronic media. First, the physical and temporal limitations of traditional media, (the size of a magazine page, the duration of a broadcast ad, etc.), do not exist in cyberspace. Rules and proscriptions developed for such traditional media do not make sense in the 'borderless', hyperlinked and dynamic environment of online transactions. Second, any attempt to develop technology-specific rules to fit existing applications of the new electronic media will quickly be overcome by events. The electronic marketplace is a fluid, changeable and unpredictable environment, and designing a regulatory model to reflect a 'snapshot' of that environment will guarantee obsolescence.
Alternatively, the dynamic, user-empowering technologies that make up the new electronic media offer the Commission creative opportunities for utilizing new technological tools for protecting consumers from deceptive and fraudulent acts. In particular, hyperlinks, seals, and other click-through technologies offer consumers new options for receiving information that will allow them to make informed choices in cyberspace. We believe that the FTC should encourage --not limit-- the use of such hyperlinks. Hyperlinks enable consumers to link to other information available within the company offering the online transaction, as well as to third party organizations such as the Better Business Bureau, or perhaps to the FTC itself.
The Commission's May 6 Notice understandably devotes a great deal of discussion to the issues of translating its traditional "clear and conspicuous" standard for consumer disclosure to the new electronic media. We would agree with the Commission that disclosures "should be unavoidable by consumers acting reasonably." We do have concerns with the somewhat dismissive conclusion that the use of scrolling, clicking to another page, or use of "pop up" technologies may be inadequate for meeting an 'unavoidability' test. As the FTC well knows, existing limitations in broadcast and print media now give us 'mouse print' auto lease-and-loan ads on television, breathless announcers racing though disclaimers on radio ads, and contract-length fine print for prescription drugs in magazine ads. We agree with the Commission that important consumer disclaimers should not be 'buried' in an endless scroll-down or made inconvenient through a hurdle of hyperlinks. However, the use of well-marked and easy-to-use pass-throughs to sites where disclosures can be laid out in a useful and consumer-friendly manner should be encouraged, not discouraged.
We do agree with the Commission that it should review its current rules and guides to ensure that the current use of such terms as "writing," "written," and "printed" do not limit the use of electronic media in making available to consumers important information on product warranties, other product labels and guarantees, and consumer disclosures.
Another area of concern is the translation to the new electronic media of current obligations --by rule or by order-- for specific and detailed requirements of the size of type and/or color contrast and other design specifications for advertisements and consumer disclosures. The use of such specific size and display requirements may be inappropriate in an on-line environment, where the end-user has much more control over the format of the display than is available through print or broadcast media displays. Online, a consumer may alter the format, design and display characteristics of a screen page. Again, the FTC should consider crafting performance standards, not design standards, for ensuring consumer awareness of important information. As suggested in the Notice, this could take the form of "requiring compliance with a general effective communication performance standard...."
ITI appreciates the opportunity to present our initial comments on the Commission plan to interpret its rules and guides for the electronic media. The views expressed here are necessarily preliminary, and we welcome the opportunity to participate in the proposed public workshop(s) to publicly discuss the issues raised in this Notice.