Internet Lawyers Specializing in Website Agreements, E-Commerce Contracts & Internet Law

Online Contract Lawyer | FTC Settles with Advertiser over Privacy Policy

The FTC settles with online advertiser Chitika, Inc. barring it from making misleading statements in its privacy policy concerning the extent of data collected from consumers. 

The FTC alleged that Chitika’s privacy policy stated that it allowed consumers to “opt-out” of having tracking cookies placed in their browsers for targeted ad placement, but that was not the case since the opt-out period only lasted several days.  According to the FTC, Chitikia’s misleading statements in its privacy policy were deceptive and in violation of federal law. 

An online contract lawyer attorney can help ensure (1) that the proper "opt-out" procedures are defined and communicated to the users as part of a Privacy Policy; (2) internal technological procedures are properly implemented to allow opt-out by users; and (3) safeguards exist to protect against clearing a user's opt-out when changes are made to, for example, the browser.  Without these online controls on your website, you are at risk of the FTC coming after you.

Violation of FTC Part 255 Endorsement Guidelines Leads to $250,000 Payment

When the guidelines relating to the use of endorsements and testimonials took effect in late 2009, many online marketers and advertisers were left to wonder what the practical effects would be.  Would the guidelines be enforced by the FTC?  Would a slap on the wrist be the worst case scenario for online marketers not in the brick-and-mortar arena?  Could online marketers claim ignorance or ask for forgiveness to avoid monetary penalties?

A recent Federal Trade Commission (FTC) announcement revealed that an online marketer has agreed to pay $250,000 for its deceptive representation that the endorsements, which were made by affiliates, were "independent" reviews of ordinary customers.  The FTC's investigation found that the endorsements were in fact made by affiliates earning commissions with each click and subsequent purchase of the online marketers' goods.

Online marketers should take notice of this and ensure that the FTC Part 255 guidelines are followed, proper monitoring is performed, and clear and conspicuous disclosures are made where necessary.  Traverse Legal's internet law attorneys can provide the advice necessary.