The Federal Trade Commission hosted a public workshop in Washington, DC on September 15, 2016 to examine the testing and evaluation of disclosures that companies make to consumers about advertising claims, privacy practices, and other information.
Effective disclosures are critical in helping consumers make informed decisions in the marketplace.
- Many advertisers have used disclosures in an attempt to prevent their advertisements from being deceptive. Disclosures must be crafted with care both with respect to their language and presentation. Disclosures used in the marketplace are sometimes ineffective. Commission staff has recommended that disclosures be tested for effectiveness.
- Disclosures are also challenging in the privacy arena, whether disclosing to consumers that their physical location or online interactions are being tracked, or explaining privacy practices when consumers sign up for a service. Privacy policies are often long and difficult to comprehend and privacy-related icons may fail to communicate information meaningfully to consumers. Furthermore, the accompanying mechanisms for consumers to provide informed consent or exercise choices about the use of their data may also be confusing. The Commission has long encouraged the development and testing of shorter, clearer, easier-to-use privacy disclosures and consent mechanisms.
- The FTC has issued guides to help businesses avoid deceptive claims, such as guidance related to endorsements, environmental claims, fuel economy advertising, and the jewelry industry. Often the guidance presents options for qualifying claims to avoid deception. In developing guides, the Commission has sometimes relied on consumer research to gauge whether specific disclosures can be used to qualify otherwise misleading claims.
The FTC has a long commitment to understanding and testing the effectiveness of consumer disclosure, and is especially interested in learning about the costs and benefits of disclosure testing methods in the digital age. A number of factors impact the effectiveness of disclosures, including whether they contain the most essential information and consumers notice them, direct their attention towards them, comprehend them, and are able to use that information in their decision making. Some testing methods are more appropriate than others for evaluating these factors.
The workshop is aimed at encouraging and improving the evaluation and testing of disclosures by industry, academics, and the FTC. The FTC’s workshop will explore how to test the effectiveness of these disclosures to ensure consumers notice them, understand them and can use them in their decision-making. It is intended to further the understanding of testing and evaluation of both offline and online consumer disclosures, including those delivered through icons, product labels, short text, long text, audio or video messages, interactive tools, and other media. Topics may include evaluation criteria, testing methodologies and best practices, case studies, and lessons learned from such testing.
The FTC live-tweeted the conference from @TechFTC using the hashtag #FTCDisclosures.