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FTC to update Net ad rules

The Federal Trade Commission is planning to update its consumer protection policies to insure that e-commerce sites post disclaimers.

The Federal Trade Commission is planning to update its advertising rules to insure that Web sites selling fake gold or unproved medical "miracles," for example, post disclaimers that are loud and clear.

Today, the FTC opened up public comment until July 7 on a proposal to more clearly apply its existing consumer protection guidelines to CD-ROMs, email, and the Net.

Across the board, the government and private sector are scrambling to revise laws and self-regulatory practices to accommodate the legal and consumer concerns that have surfaced with the boom in Net access and e-commerce.

For example, in the face of a strict European Union privacy protection law going into effect this fall, the White House is under the gun to establish better guidelines regarding the online collection and redistribution of consumers' personally identifiable information.

The FTC also has undertaken the online privacy debate, but the plan submitted this week only will apply to promises companies make about their products. If claims are inaccurate, the FTC could file a civil lawsuit.

In the past the agency has cracked down on bulk emailers and Web sites that allegedly made false claims about services or programs. Specific targets for investigation have been so-called pyramid schemes and other "get-rich-quick" offers.

"The purpose of the proposal is to clarify how the FTC's rules and guidelines will apply to a range of online [activity] from environmental marketing practices to credit practices," said Laura DeMartino, a staff attorney for the FTC's Bureau of Consumer Protection.

"The clarification is necessary because some of the rules only apply to 'written' communication, which some may think only means print media," she added. "In print ads, disclosures have to be clear and conspicuous. But Web sites have so many features that the commission has proposed guidelines for how it will evaluate online disclosure."

Net sites or email that promote products may contain scroll bars, frames, or other bells and whistles that prevent a disclosure from jumping out at a surfer, the FTC said. Still, the agency says online disclosures--which are aimed at preventing consumer confusion and deception--must be unavoidable and placed prominently and in proximity of a claim and repeated where necessary. The FTC also is suggesting that disclaimers be done in written or visual formats.

Other government agencies are tackling truthfulness in advertising on the Net as well.

For more than a year, the Food and Drug Administration (FDA) has been mulling over new rules regarding the marketing and selling of drugs over the Net.

Online and offline, drug companies are prohibited from promoting products for uses that aren't approved by the FDA. But the FDA is considering forbidding companies from even linking to sites that offer alternative uses for a product. The agency also wants to stall the online--and therefore worldwide--promotion of drugs that are still being tested.

The FDA had said it would issue guidelines last summer. Now, however, the new rules aren't expected until the end of the year, in part because the agency has been dealing with the liberalization of laws to allow companies to market directly to consumers through TV ads.

"It's a very complex thing and we have to work in conjunction with other groups, such as the FTC and the World Health Organization," Brad Stone, a spokesman for the FDA, said today.

"In large part, though, the Net already is addressed by existing laws and regulations. The ground rules are laid out; the presentation has to be accurate and balanced, and a site can't promote an unapproved product," he added. "If you do one of those things and it poses a public health hazard, we will take action."