Regulatory Enforcement of Your Website: Who Will be Watching?

The Online Advertising Law Workshop

Chicago, Illinois

Date:
By: 
Roscoe B. Starek, III, Former Commissioner

Good morning. I'm pleased to be here to open this workshop on online advertising law by answering the question "Who Will Be Watching Your Website?" Well, one of the law enforcers likely to be watching is the Federal Trade Commission, as part of its program of generally monitoring national advertising to identify and enforce against deceptive or unfair advertising. We've been wrestling with online enforcement issues for several years now. This morning I'd like to share with you some of the more difficult issues and how at least one Commissioner views them. I'll begin with one technique for avoiding overly broad claims: a disclaimer. The views that I express here today are my own, and do not necessarily reflect those of the Commission or any other Commissioner.

The Federal Trade Commission

As many of you know, the Federal Trade Commission is the only national government agency with a broad consumer protection law mandate. Section 5 of the Federal Trade Commission Act ("FTC Act") prohibits unfair or deceptive acts or practices in or affecting commerce.(1) The Commission also enforces a variety of other consumer protection statutes, such as the Fair Credit Reporting Act,(2)but my comments today will focus on the application of Section 5 to online advertising.

Deception

The FTC's Section 5 deception standard is set forth in the Commission's Deception Policy Statement.(3) It asks whether the challenged representation or practice is one that would likely deceive a consumer acting reasonably under the circumstances in a material way -- that is, in a way that affects the consumer's conduct or choice regarding a product or service.

If you attended the Aggressive Advertising conference that concluded yesterday, you already know that Section 5 requires objective claims in advertising to be both truthful and substantiated. Every time an advertiser makes an objective claim, the advertiser also implies that there is a reasonable basis -- "substantiation" -- for the claim.(4) It is deceptive to make a claim without prior substantiation.

What constitutes a reasonable basis for a particular claim can vary, depending upon the nature of the claim, the product, the consequences of a false claim, the benefits of a truthful claim, the cost of developing substantiation for the claim, and the amount of substantiation that experts in the field believe is reasonable. Health and safety claims generally require competent and reliable scientific evidence.(5) And if a marketer makes a representation that a claim has a particular level of support -- for example, "clinical studies prove . . ." -- the law requires at least that level of substantiation.

The FTC does not pursue subjective claims or puffery -- claims like "this is the best hairspray in the world." But if there is an objective component to the claim -- such as "more consumers prefer our hairspray to any other" or "our hairspray lasts longer than the most popular brands" -- then you need to be sure that the claim is not deceptive and that you have adequate substantiation before you make the claim. These requirements apply both to explicit or express claims and to implied claims. Also, a statement that is literally true can have a deceptive implication when considered in the context of the whole advertisement, even if that implication is not the only possible interpretation.

Unfairness

We can also challenge unfair acts and practices under the FTC Act -- those that cause or are likely to cause substantial injury to consumers when that injury is not reasonably avoidable by the consumers themselves and is not outweighed by countervailing benefits to consumers or competition.(6) Although injury must be both substantial and likely, unwarranted health or safety risks can suffice. For example, the distribution of free sample razor blades without protective packaging in home-delivered newspapers poses a direct risk of injury to young children and others who might handle the papers.(7)

In any unfairness inquiry, the issue that is apt to be most difficult is causation. In 1994, a majority of the Commission -- including me -- decided to close an investigation of whether the R.J. Reynolds Tobacco Company had engaged in unfair practices through its use of the "Joe Camel" campaign to promote Camel cigarettes. We said then that "[a]lthough it may seem intuitive to some that the Joe Camel advertising campaign would lead more children to smoke or lead children to smoke more, the evidence to support that intuition is not there."(8) As the statement said, the record did not show a link between the Joe Camel advertising campaign and increased smoking among children sufficient to justify a charge of unfairness in violation of the FTC Act.

Congress amended the FTC Act later that year to specify that an unfair act or practice is one that causes or is likely to cause substantial injury to consumers that is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or competition.(9)Essentially, Congress codified the Commission's injury test for unfairness as set forth in the Unfairness Policy Statement. At the same time, Congress expressly barred the Commission from relying on public policy considerations as the primary basis for an unfairness determination.

The Commission still alleges deception far more frequently than unfairness, but we recently pursued unfairness allegations in several cases.(10) I supported all of them, except for issuance of a revised complaint against R.J. Reynolds alleging that the Joe Camel advertising campaign is unfair. I voted against that complaint because the evidence, including new evidence not before the Commission in 1994, did not give me reason to believe that there is a likely causal connection between the Joe Camel campaign and smoking by children. I also stated that it is not in the public interest for the Commission to expend its scarce resources on this litigation while other developments might largely duplicate any remedies the Commission might obtain.

It would be a mistake to underestimate the possibility of additional unfairness enforcement actions by the Commission, including possible enforcement against alcohol advertising that may appear, by placement or content, to be targeted to children. I want to emphasize that the Commission is applying the codified injury requirement with scrupulous care. Of course, in any particular case individual Commissioners may disagree as to the level of evidence needed to satisfy the requirement that an alleged unfair act or practice "causes or is likely to cause substantial injury."

Remedies

The Commission has a variety of tools available to it to attempt to prevent future harm to consumers, including law enforcement actions in federal court or before an administrative law judge, issuing rules or guidelines, and consumer education. Court or administrative orders sought by the Commission prohibit deceptive or unfair claims and almost always impose "fencing-in" relief that covers claims or products beyond those that were the subject of the complaint. In appropriate cases, disclosures may be required to correct or prevent deception. Corrective advertising is warranted in the rare case in which the challenged ads substantially contributed to the development and maintenance of a false belief that lingers or is likely to linger in the minds of consumers.(11) The Commission also may seek redress for consumers or disgorgement in cases involving dishonest or fraudulent conduct. Violations of a Commission order or rule may result in the imposition of civil penalties.

Applicability of Section 5 to Online Advertising

If you take away just one concept from my presentation, remember that Section 5 applies to online advertising. The Commission already has enforced Section 5 of the FTC Act in online marketing cases involving pyramid schemes, credit repair scams, unsubstantiated claims about business opportunities, deceptive promotions of "free" trial offers, and other deceptive billing practices. Several proposed or final consent orders address how to make required disclosures in ads on electronic media, including the Internet. Commission staff have participated with other law enforcement agencies in both the U.S. and Canada in Internet "Surf Days," including, for example, Pyramid Surf Day which targeted online pyramid scams. Surf Days are designed to identify sites that may be engaging in law violations, educate the site operators about legal requirements, deter future illegal activity, and, through publicity, educate consumers. In short, count on continued, vigorous FTC efforts to combat fraud and deception online.

Traditional Advertising Issues in the Online Environment

Net Impression

The characteristics of an advertising medium can affect the application of deception analysis. For example, a prominent disclosure in a print ad might not translate adequately to radio, even if the same words used, depending upon how quickly and audibly they are read. In all media, the Commission looks at the "net impression" created by advertising. Rather than looking in isolation at the individual portions of an ad -- the headline, highlighted text, a photograph --, we consider the overall effect of the ad on consumers.(12)

Determining the net impression created by an online ad can be significantly more complicated than determining the net impression created by a magazine ad. What do consumers see when they pull up your Web site? If it varies -- as it likely will depending upon at what point consumers access the site or how much of the page is displayed by their browsers without additional scrolling -- then you should be concerned about whether some consumers are seeing so little of your ad that they are likely to be misled. You may be able to avoid this with an unavoidable or repeated disclosure that consumers must access before they enter into the advertisement and before they make a purchase, or by careful design of your page to ensure that even those consumers who view only a limited portion do not receive a glimpse that misleads them.

That design may present a real challenge. I am reminded of the classic Hindu parable about the six blind men and the elephant. Hoping to learn more about elephants, each visited an elephant and came away with a different impression. The one who touched the elephant's side thought an elephant was like a wall; the one who felt his tusk thought an elephant was like a spear; the one who happened to grab hold of the elephant's trunk decided the animal was like a snake; and so on.(13) Likewise, consumers who only focus on part of your Web site or Web pages can come away with very different impressions about what your ad says. In our parable, each observer might have gotten the whole picture if the elephant wore numerous small tags impressed with the outline of the entire animal, but all that body piercing might have had some negative consequences for the elephant. How do you avoid annoying your customers with unavoidable disclosures and driving away potential business? I'm confident that if anyone is up to that creative challenge, the advertising industry is.

Disclaimers and Disclosures

The net impression of an ad may be affected by disclaimers or disclosures of potentially misleading interpretations. This is tricky, however. Disclosures that flatly contradict a deceptive claim, or that purport not to make the claim, are generally ineffective. Often, the best approach is not to make a claim so broad that you cannot substantiate it. Instead, narrow the claim to what you have substantiation for, so you do not need a separate disclosure about how narrow the claim is.

If you use a disclosure, be sure the consumer notices and understands it. Under Section 5, the Commission usually requires that disclaimers be clear and conspicuous. This concept presents some challenges when applied to online advertising, but the bottom line is whether the information is effectively communicated to consumers to prevent deception. We look to see if the disclosure is readily noticeable, readable if it appears in print or other visual media, and audible if it appears in radio or television. Proximity, size, and placement of a disclaimer are all relevant, but it's not just the format that matters.

The Commission also looks at the content of the disclaimer, the language and syntax, to determine whether the disclosure is likely to be understood by consumers. What we said in our 1984 Deception Statement still holds true: "Qualifying disclosures must be legible and understandable. In evaluating such disclosures, the Commission recognizes that in many circumstances, reasonable consumers do not read the entirety of an ad or are directed away from the importance of the qualifying phrase by the acts or statements of the seller."(14) For example, placing a disclaimer at the bottom of a Web page may be completely ineffective, because many browsers display only a portion of the page and require the consumer to scroll down to see the entire page.(15) Consumers may not be motivated to read your entire page.

Because consumers may access a Website at different points in the site, they may well miss a disclaimer on the home page. In some ways, this characteristic resembles that of infomercials, or program length television advertisements. A consumer may turn on the tv or channel surf midway into an infomercial, and miss a disclosure at the beginning of the program. Like infomercials, much online advertising is a direct response medium: consumers can easily order immediately in response to the advertising. For this reason, repetition of a disclosure when ordering information is provided can help prevent consumers from making a purchasing decision without benefit of the disclosure. In cyberspace, consumers do not even need to make a telephone call that might involve talking to a sales representative and obtaining more information -- they can buy with a mouse click. So, concern about consumers actually seeing and understanding a disclosure before they act is heightened. Depending upon the likelihood that consumers would be deceived without a disclosure, it may be necessary to place the disclosure on the same page as ordering information or to emphasize it with graphics or an unavoidable pop-up screen.

Proposed and Final Consent Orders

Several Commission consent orders shed some light on when and how to make disclosures in online advertising. In a matter involving alleged false and unsubstantiated claims about the effectiveness of a portable food cooler and warmer, a consent order issued in February 1997 requires clear and prominent disclosures about how to use the product safely.(16) For advertisements on electronic media, such as the Internet or commercial online services, the order requires that the disclosure be in a type size and a location that are sufficiently noticeable so that an ordinary consumer will see and read it, in print that contrasts with the background against which it appears. The order specifies that in multi-screen documents, the disclosure must appear on the first screen and on any screen containing ordering information.

The same definition of "clearly and prominently" appears in an order recently accepted by the Commission for comment settling allegations of deceptive advertising for Herbal Ecstacy, a dietary supplement containing ephedrine and marketed as producing euphoric sensations with no side effects.(17) The proposed order requires that safety and side effects claims for any food, drug, or dietary supplement be truthful and substantiated, and that advertising, promotional materials, and product labels and inserts for Herbal Ecstacy or other ephedrine products clearly and prominently disclose a warning statement about the dangerous health effects of ephedrine and that the risk of injury increases with dose.

In May 1997, the Commission accepted for comment consent agreements against America Online, Inc. ("AOL"), CompuServe, Inc., and Prodigy Services Corp. settling allegations that these companies violated Section 5 by misrepresenting and failing adequately to disclose the terms of free trial offers of their online services.(18) AOL also allegedly violated Section 5 by misrepresenting and failing adequately to disclose its practice of adding a fifteen second surcharge to each on-line session and by misrepresenting the terms of its checking account debiting program.(19) The challenged misrepresentations and failures to disclose occurred during the online registration process and in advertising in a variety of media.

The proposed orders prohibit misrepresentations about the terms or conditions of trial offers for online services.(20) First, they would prohibit representations that an on-line service is "free" unless the respondents disclose clearly and prominently any obligation to cancel or take other affirmative action to avoid charges. For representations made in instructional materials, the disclosure must be in a type size and in a location sufficiently noticeable so that an ordinary consumer could notice, read, and comprehend the disclosure. For claims made in the context of advertisements or promotions through any media, including an interactive network, the companies must use a summary disclosure statement directing consumers to a location where the full required disclosure is available. The orders provide an example: the words "For conditions and membership details" followed by "load up trial software" or "see registration process" or words to similar effect. The characteristics of the required statement vary slightly according to whether it is made in audio, video, or print, but in any medium it must be noticeable and comprehensible to an ordinary consumer.

Second, the proposed orders introduce the concept of the "unavoidable disclosure." The orders would require the companies to disclose clearly and prominently during the registration process the terms of all mandatory financial obligations consumers will incur, including any membership or usage fees, and any obligation to cancel or to take other action to avoid charges. The companies must provide at least one reasonable means for consumers to cancel their membership. AOL additionally is required to disclose during registration the manner in which fees or charges are assessed and calculated. AOL may satisfy this requirement by disclosing that additional charges might apply, that information about assessing and calculating fees or charges can be found online, and the exact location where this information can be found.

All of the online registration disclosures must be of a size and shade and appear for a length of time sufficient for an ordinary consumer to notice, read, and comprehend them. Moreover, the disclosures must "not be avoidable" by consumers. This standard leaves the companies with some flexibility. For example, it could be satisfied by placing the disclosures on a screen or screens that consumers must access during the registration process. The orders provide that a disclosure will not be considered "avoidable" based solely on an ordinary consumer's failure to read it.

The availability of hypertext links from one Web page to another raises questions about whether adequate disclosures may be made online on a separate page. In traditional media, an asterisk that refers the reader to a fine print footnote rarely is a sufficient disclosure. In our experience, consumers tend to overlook obscure disclosures. Online advertising poses new versions of what has been called the asterisk issue. Is a highlighted link that says "read this before you buy" or "things you need to know" sufficient if full disclosures are provided on a separate page? Or, since access to the disclosures requires an affirmative act, would these disclosures necessarily not be prominent?

The proposed orders against AOL, Prodigy, and Compuserve suggest that at least some summary disclosures directing consumers to more complete information may be permissible; they should not be read so broadly as to imply that a vague cross- reference or a question-mark icon will suffice. Ambiguous language or symbols are unlikely to effectively communicate the existence of fuller disclosures.

Online Privacy Issues

The Commission has taken the lead in examining online privacy issues related to deception or unfairness. Online technology allows marketers to track a consumer's behavior -- to see what sites the consumer visits and what products the consumer buys. Other methods of collecting personal information, including the use of registration screens that require visitors to provide information to access the site, are a valuable resource for marketing but raise concerns about whether marketers may deceive consumers about what information is being collected and how it may subsequently be used.

The Commission's Privacy Workshops

In June 1996, the Commission held a public workshop on Consumer Privacy on the Global Information Infrastructure. Workshop participants agreed that consumers are concerned about the online collection of personal information generally, but particularly so when information is collected from children. Consumer concerns about privacy may cause consumers to limit their use of online technologies, and workshop participants agreed that privacy concerns need to be addressed if online commerce is to thrive. There also was broad agreement that the elements of effective consumer privacy protection online included notice, choice, security, and access. When it came to specific ways to accomplish these goals, however, opinions varied considerably. Some favored guides, while others urged the Commission not to take any action pending self-regulatory efforts by online marketers.

The FTC staff report on the workshop recommended that the Commission keep abreast of technological and self-regulatory developments that affect privacy protection online by convening a follow-up workshop. In June 1997, we held four additional days of hearings on Consumer Information Privacy, including the collection and use of identifying information in computerized databases, the use of unsolicited commercial e-mail, consumers' online privacy generally, and children's privacy online. The purpose of the 1997 workshop was to gather new information to assist the Commission in its consideration of the implications of online privacy issues for its consumer protection mission. Commission staff are considering the workshop record to help determine what, if any, further action to recommend in the area of online privacy protections.

For example, the Commission is conducting a study of computerized databases that contain what consumers may perceive to be sensitive identifying information, such as social security numbers, unlisted phone numbers, and prior addresses. The 1997 workshop examined the uses, benefits and risks associated with such look-up services, and a number of industry members offered a preliminary self-regulatory proposal to limit the availability of sensitive information, ensure accuracy and security of the information, and educate consumers.

The 1997 workshop also provided valuable information on consumer attitudes toward unsolicited commercial e-mail, the costs this type of e-mail imposes on recipients and on Internet service providers, and the frequent use of false return addresses and header information. On the other hand, there was extensive testimony about the commercial benefits of this marketing medium as an inexpensive way to reach consumers and to provide individualized marketing. Workshop participants are attempting to develop a self-regulatory response to consumer and industry concerns, and will report back to the Commission early next year.

The workshop provided useful consumer survey research showing that consumers care very much about the security and confidentiality of their personal information online. Participants presented a wide variety of self-regulatory measures to disclose information collection practices and provide consumers with the opportunity to choose whether and how their information should be used.

With respect to children's online privacy, the workshop confirmed that many children's Web sites gather personal information. Most seem to use it only for internal purposes, but some disseminate it more broadly. Only a few provide notice to parents or a way for parents to limit disclosure of the information that is collected.

Survey research submitted at the workshop reveals that parents care deeply about the collection and use of their children's information. According to a survey conducted by Louis Harris & Associates, 97% of parents whose children are online believe that Web sites should not collect children's real names and addresses and sell or rent that information to others. Even if children's personal information is used only within the company collecting it, 72% of the parents surveyed oppose its collection. Other attitude surveys presented at the workshop show that parents want to be empowered to be parents on the Net: to have some degree of control over what information their children may provide to others.

Workshop participants were divided over how to accomplish this. Some stressed technological solutions that may help protect children from data collection not authorized by their parents, and provide a means for obtaining consent from parents or others responsible for supervising children. A number of software blocking and filtering products are available now. Testing by an independent consumers' organization, however, shows that many of these can be circumvented and other testimony indicates that parents -- whose computer skills may lag behind those of their children -- need further education and experience to use these tools effectively.

Many workshop participants argued that self-regulation could resolve concerns about children's privacy online, combined with government enforcement against practices that violate current laws. Several industry guidelines for the collection and use of children's information have recently been announced by organizations such as the Direct Marketing Association and the Children's Advertising Review Unit of the Council of Better Business Bureaus. Private efforts to educate businesses and seek compliance are underway.

Some participants called for the FTC to issue guidelines on children's privacy. Generally, however, workshop participants favored self-regulation, the development of technological tools to protect children's privacy, and limitation of government action to narrow circumstances, such as failure to comply with a stated privacy policy.

FTC Staff Response to CME Petition

Meanwhile, in July Commission staff addressed some privacy-related deception and unfairness issues in a letter responding to a petition filed with the Commission by the Center for Media Education ("CME").(21) CME asked us to investigate alleged deceptive and unfair practices of "KidsCom," a children's Web site that uses an online survey and an e-mail pen pal program. The staff response outlines several principles that the staff believes should apply generally to the online collection of personally identifiable information from children. The staff concludes that it is a deceptive practice to represent that information is being collected for one purpose when it will also be used for another purpose that parents would find material, unless there is a clear and prominent notice to a parent.

The letter also states that it likely is an unfair practice to collect personally identifiable information from children and sell or disclose that information without providing parents with notice and an opportunity to control its collection and use. According to FTC staff, an adequate notice should include: who is collecting the personally identifiable information, its intended use or uses, to whom and in what form it will be disclosed to third parties, and how parents may prevent the retention, use, or disclosure of the information. Parental consent must be obtained before children's personally identifiable information is released to a third party. Staff's letter is available on the Commission's Web site.

The same letter notes that "passing off of an advertisement as an independent review or endorsement is a deceptive practice under Section 5 of the FTC Act. This is based on the common sense notion that independent product evaluations are material to consumers, i.e., that consumers reading what appears to be an independent review or news report about a product are likely to give it more credence than they would give what they know to be an advertisement."

The Commission's Privacy Plans

Recently, the Commission outlined some of the steps we plan to take in the next year to address consumer privacy issues.(22) By the end of this year, we intend to submit to Congress a report on the computerized database study, addressing such issues as the misuse of personal information and consumer access to their own information, as well as the extent to which government action, if any, may be needed.

Commission staff are monitoring unsolicited commercial e-mail to see if it involves unfair or deceptive practices. For example, some unsolicited e-mail messages may deceptively represent the source or content to entice the recipient to open the mail and read it. The Commission will bring appropriate enforcement actions against spammers who engage in deceptive or fraudulent practices. Commission staff also will monitor self-regulatory efforts in this area.

Our staff will also watch commercial Web sites to find out to what extent they disclose their information policies and offer consumers choice about the collection and use of their personal information online. The Commission plans to report its findings to Congress by June 1, 1998. Our recommendations, if any, will take into account whether there is broader, industry-wide progress toward effective self-regulation.

Commission staff will continue to monitor self-regulatory efforts in the privacy area, including children's information practices. Following the initial staff guidance provided in the CME letter, you can expect to see continued review of the online collection and use of information from children by commercial Web sites. Carefully selected enforcement actions, if needed, will help support industry self-regulation. The Commission will continue to explore the possibility of additional guidance that would help clarify for the business community what constitutes an unfair or deceptive practice in the context of online information collection from children.

Conclusion

If you remember just one thing about my talk today, recall that consumer protection laws apply to advertising online. Watch for additional law enforcement actions and possible guidance on how the Commission applies its rules, guides, and statutes to online commerce.

Meanwhile, I offer you my shorthand guide to compliance with Section 5. When planning your online advertising, start by asking two questions: "Will consumers get it?" and "Can I support it?" You should ask "Will consumers get it?" to figure out what claims consumers take from your advertising -- whether expressly or implicitly made by the ad. Don't make the mistake of confining this inquiry just to the messages that you intend to communicate. Next, ask whether you can adequately support -- in FTC parlance, "substantiate" -- the claims that consumers take from your ad. Finally, if you use a disclaimer in your ads, ask yet again "Will consumers get it?" or, like the blind men and the elephant, will they perceive just one part and arrive at the wrong conclusion?

Endnotes:

1. 15 U.S.C. § 45(a).

2. 15 U.S.C. § 1681 et seq.

3. Letter from the Federal Trade Commission to Hon. John D. Dingell, Chairman, Committee on Energy and Commerce, U.S. House of Representatives (Oct. 14, 1983), reprinted in Cliffdale Assoc., Inc., 103 F.T.C. 110, 174 (1984) ("Deception Statement").

4. See generally Policy Statement Regarding Advertising Substantiation, appended to Thompson Medical Co., Inc., 104 F.T.C. 648, 839 (1984).

5. Competent and reliable scientific evidence consists of tests, analyses, research, studies or other evidence based on the expertise of professionals in the relevant area. Such tests or studies need to be conducted and evaluated in an objective manner by qualified persons, using procedures generally accepted in the relevant profession to yield accurate and reliable results.

6. 15 U.S.C. § 45(n). See also Letter from the Federal Trade Commission to Hon. Wendell Ford and Hon. John Danforth, Committee on Commerce, Science and Transportation, U.S. Senate (Dec. 17, 1980) ("Unfairness Policy Statement"), appended to International Harvester Co., 104 F.T.C. 949, 1070 (1984).

7. See Philip Morris, Inc., 82 F.T.C. 16 (1973).

8. R.J. Reynolds Tobacco Co., File No. 932-3162 (Joint Statement of Commissioners Mary L. Azcuenaga, Deborah K. Owen, and Roscoe B. Starek, III) (June 6, 1994).

9. 15 U.S.C. § 45(n).

10. Sears, Roebuck and Co., File No. 972-3187 (consent agreement accepted for public comment) (June 3, 1997) (unlawful collection of debts that were legally discharged in bankruptcy proceedings); FTC v. David L. Amkraut, Civ. 97-054-RSWL(BQRx) (C.D. Cal. 1997) (submitting disqualifying, multiple entries on behalf of his clients in State Department's green card lottery; failing timely to forward to lottery winners the materials necessary for them to apply for visas); FTC v. Diversified Marketing Service Corp., Civ. 96-0388M (W.D. Okla. 1996) (unauthorized bank debits and credit card charges); FTC v. Windward Marketing, Ltd., 1:96-CV-615-FMH (N.D. Ga. 1996) (same). See also R.J. Reynolds Tobacco Co., Docket No. 9285 (complaint issued May 28, 1997) (allegedly inducing children to smoke or continue smoking through advertising campaign).

11. See Warner Lambert Co. v. FTC, 562 F.2d 749 (D.C. Cir. 1977), cert. denied, 435 U.S. 950 (1978); American Home Products Corp., 98 F.T.C. 136, 407 (1981), enforced as modified, 695 F.2d 681 (3d Cir. 1982).

12. Deception Statement, 103 F.T.C. at 175 n.4.

13. The full text of the poem by John Godfrey Saxe, adapted from the Udana, is available at <http://aries.phys.yorku.ca/~mmdr/elephant_theology.html>.

14. Deception Statement, 103 F.T.C. at 180-81.

15. See, e.g., FTC Staff Opinion Letter Regarding Internic Software (August 21, 1997).

16. Comtrad Industries, Inc., Docket No. C-3719 (Feb. 25, 1997) (final order).

17. Global World Media Corp., File No. 962-3210 (July 21, 1997) (consent agreement accepted for public comment).

18. America Online, Inc., No. 952 3331 (FTC May 1, 1997) (consent agreement placed on the public record); CompuServe, Inc., No. 962 3096 (FTC May 1, 1997) (consent agreement placed on the public record); Prodigy Services Corp., No. 952 3332 (FTC May 1, 1997) (consent agreement placed on the public record).

19. All three companies also were alleged to have violated the Electronic Fund Transfer Act and its implementing Regulation E in connection with consumers' authorization of electronic payments.

20. In addition, the proposed order against AOL would prohibit misrepresentations of billing practices and the terms of any electronic fund transfer program it uses.

21. FTC Staff Opinion Letter Responding to Petition Filed by Center for Media Education (July 16, 1997).

22. Letter from the Federal Trade Commission to the Hon. John McCain, Chairman, Committee on Commerce, Science, and Transportation, U.S. Senate, and the Hon. Thomas Bliley, Chairman, Committee on Commerce, U.S. House of Representatives (July 31, 1997).