Opening Remarks of FTC Chairwoman Edith Ramirez

An FTC Workshop: Putting Disclosures to the Test

Washington, D.C.

September 15, 2016

Welcome to today’s Federal Trade Commission workshop on disclosures and specifically 

the importance of testing disclosures. This is a topic that the FTC has been thinking about and 

studying practically from the moment the agency opened its doors more than a hundred years 

ago. 

In our consumer protection work, one of our primary tasks is to ensure that consumers 

have access to accurate information to enable them to make informed decisions in the 

marketplace. One way that businesses communicate information to consumers is through 

disclosures. “Disclosure” is a broad term that encompasses a range of statements. Here at the 

FTC, when we think about disclosures, we generally focus on the disclosure of information that 

affects consumer welfare.

In some cases, disclosures are necessary to limit or qualify other advertising or marketing 

statements in order to prevent deception. Other disclosures are required to inform consumers of 

the risks or dangers from using certain products. Still others make consumers aware of choices 

they may have. For instance, some of the disclosures required by FTC rules include energy 

consumption labels on appliances, fuel labels at the gas pump, and price lists for funeral services. 

These help inform consumers when they are choosing between different products or services. In 

our privacy work, we encourage companies to disclose their data practices so that consumers can 

make choices that allow them to exercise greater control over the way their personal information 

is used. 
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It’s clear that disclosures play an important role in protecting consumers. That’s why the 

FTC requires that necessary disclosures be “clear and conspicuous.” We want consumers to see 

or hear the disclosure, to understand it, and to use the information conveyed to make informed 

decisions. But we recognize that accomplishing all three of these objectives can sometimes be 

challenging. We are here today to discuss how businesses can test and evaluate their disclosures 

to ensure they are effective. 

I. FTC Guidance

To set the stage for today’s discussion, I would like to describe briefly some of the 

agency’s recent efforts to help the business community provide meaningful and useful 

disclosures to consumers, particularly in the face of technological changes that have transformed 

the marketplace. The basic legal principles we apply remain the same, but context matters.

In the early 2000s, the FTC issued guidance on “Dot Com Disclosures.”1 This guidance 

explains what “clear and conspicuous” means in the context of online advertising and sales, 

explaining how the “4Ps” at the core of our “clear and conspicuous” standard – prominence, 

presentation, placement, and proximity – apply to the online world. We updated that guidance in 

2013 to address technological developments like the use of smartphones, tablets, and apps.

2

In addressing the challenges that new and emerging technologies can pose to effective 

disclosures, we have learned from research in the marketing field about the need not only for 

clear and conspicuous but also “just-in-time” disclosures. As discussed in a 2013 report on 

mobile privacy disclosures, we recommend that mobile platforms provide just-in-time 

 1 FED. TRADE COMM’N, DOT COM DISCLOSURES: INFORMATION ABOUT ONLINE ADVERTISING (May 2000), available 

at https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-issues-guidelines-internetadvertising/0005dotcomstaffreport.pdf. 2 FED. TRADE COMM’N, .COM DISCLOSURES: HOW TO MAKE EFFECTIVE DISCLOSURES IN DIGITAL ADVERTISING

(Mar. 2013), available at https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-revises-onlineadvertising-disclosure-guidelines/130312dotcomdisclosures.pdf.
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disclosures and obtain affirmative express consent before allowing apps to access sensitive 

content such as geolocation information.3

We have also provided specific guidance about social media marketing disclosure issues. 

Our Endorsement Guides have long required the disclosure of material relationships between an 

advertiser and an endorser. In 2009, we noted the need for bloggers and celebrities to disclose 

material connections when promoting products on social networks.

4

 Last year, we provided 

recommendations about how to make material relationship disclosures in connection with social 

media contests, online review programs, and claims by expert endorsers outside of traditional 

ads.

5

 

We have also sought to highlight the importance of disclosures in these areas with active 

enforcement. Recently, for example, we settled charges against Warner Brothers Home 

Entertainment, alleging that it failed to adequately disclose that it paid YouTube influencers 

thousands of dollars to post positive video reviews of the company’s games.

6

 Among other 

things, we emphasized that it is not enough to include disclosures in easy-to-miss description 

boxes of YouTube videos, rather than in the videos themselves. 

Additionally, with the rise of new forms of non-traditional advertising, we provided

detailed guidance last year on disclosures in “native ads,” which are ads that are made to look 

 3 FED. TRADE COMM’N STAFF, MOBILE PRIVACY DISCLOSURES: BUILDING TRUST THROUGH TRANSPARENCY, 15-16

(Feb. 2013), available at https://www.ftc.gov/sites/default/files/documents/reports/mobile-privacy-disclosuresbuilding-trust-through-transparency-federal-trade-commission-staff-report/130201mobileprivacyreport.pdf. 4 See FED. TRADE COMM’N, Press Release, FTC Publishes Final Guides Governing Endorsements, Testimonials 

(Oct. 5, 2009), available at https://www.ftc.gov/news-events/press-releases/2009/10/ftc-publishes-final-guidesgoverning-endorsements-testimonials. 5 FED. TRADE COMM’N, The FTC’s Endorsement Guides: What People Are Asking (May 2015), available at

https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking. 6 See FED. TRADE COMM’N, Press Release, Warner Bros. Settles FTC Charges It Failed to Adequately Disclose It 

Paid Online Influencers to Post Gameplay Videos (July 11, 2016), available at https://www.ftc.gov/newsevents/press-releases/2016/07/warner-bros-settles-ftc-charges-it-failed-adequately-disclose-it. 
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like news, entertainment, or other editorial content.

7 We emphasize that native advertising 

disclosures should appear where consumers will look. They should be in front of or above a 

headline. If an image is the ad’s focal point, then the disclosure should be on top of the image.

This guidance, along with our enforcement actions, policy statements, rules, and reports, 

explain how we think about disclosure issues and how companies can stay on the right side of 

the law. 

II. Importance of Testing Disclosures

Let me now turn to the importance of testing the effectiveness of disclosures. The FTC 

has long benefitted from empirical testing of disclosures and used it to inform our enforcement 

and policy efforts.

In the last 15 years, for example, with the help of the economists in our Bureau of 

Economics and our marketing experts in the Bureau of Consumer Protection, we have tested a 

number of different disclosures: financial privacy notices; testimonial disclosures; disclosures 

related to health claims for foods; green marketing disclosures; energy label disclosures; “up to” 

claims; homeopathic disclosures; and organic disclosures.8

 

In addition to our own research and testing, we pay attention to the research of academics 

and experts in marketing, behavioral economics, cognitive science, computer science, and other 

relevant fields. 

This brings me to the reason we are here today. Our focus in this workshop is not on 

what must be disclosed to consumers, or even on the most effective methods of disclosing 

 7 FED. TRADE COMM’N, Native Advertising: A Guide for Businesses (Dec. 2015), available at 

https://www.ftc.gov/tips-advice/business-center/guidance/native-advertising-guide-businesses. 8 See, e.g., FTC Disclosure Evaluation Reports (Sept. 2016), available at 

https://www.ftc.gov/system/files/documents/public_events/950633/ftc_disclosure_evaluation_reports_0.pdf. 
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information to consumers. Rather, we will focus on how to evaluate whether disclosures are

effective. 

For example, we know that ineffective disclosures can overwhelm, confuse, or even 

distract consumers from making informed choices. This is due to the number of factors that can 

impact the effectiveness of disclosures, including whether consumers direct their attention 

towards them, understand them, and are able to use that information in their decision-making. 

In our recent case against Practice Fusion, for instance, we made clear that the needed

disclosures should grab a consumer’s attention – or as we said in the order, they should be 

“difficult to miss.”9

 In that case, we alleged that the failure to provide a clear and conspicuous 

disclosure that patient feedback would be posted online resulted in the inadvertent revelation of 

personal and sensitive health information by hundreds of patients.10

In light of recent research on how consumers process information and behave, it is also 

important to pay attention to ensuring that disclosures provide useful information that can 

translate into consumer action. 

There are also other issues that we have to consider. Some critics question the 

effectiveness of disclosures altogether in certain areas – privacy is one example. We disagree 

with those critics, not only because we believe that targeted, understandable, and timely 

disclosures can be useful to consumers in many circumstances but also because disclosures can 

serve different functions, including conveying important information to consumer advocates and 

regulators. I can assure you, however, that we are committed to asking hard questions about the 

 9 FTC v. Practice Fusion, Inc., No. C-4591 (F.T.C. Aug. 15, 2016) (consent order), available at

https://www.ftc.gov/system/files/documents/cases/160816practicefusiondo.pdf. 10 See FED. TRADE COMM’N, Press Release, Electronic Health Records Company Settles FTC Charges It Deceived 

Consumers About Privacy of Doctor Reviews (June 8, 2016), available at https://www.ftc.gov/news-events/pressreleases/2016/06/electronic-health-records-company-settles-ftc-charges-it-deceived.
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effectiveness of disclosures and deepening our understanding of the role disclosures play in 

protecting consumers and enhancing consumer welfare. 

Before I close, I also want to mention an important and related conference that our 

Bureau of Economics is co-hosting tomorrow with the journal Marketing Science. Among other 

things, we would like to see marketing experts do more potentially high impact research in the 

areas of consumer protection and regulation. All of the papers presented at that conference will 

be posted on our website, and I encourage you to take a look.

III. Conclusion

Let me conclude by emphasizing that, with this workshop, we aim to highlight the 

importance of empirical analysis of disclosures and encourage marketers, businesses, and other 

organizations to test their own disclosures and learn from researchers. 

And, finally, I want to thank our speakers for being here and sharing their expertise with 

us and the FTC staff who organized this workshop: Joe Calandrino, Ryan Mehm, Hampton 

Newsome, and Michael Ostheimer from our Bureau of Consumer Protection, Laura Hosken and 

Jan Pappalardo from our Bureau of Economics, and our Chief Technologist, Lorrie Cranor. 

Thank you for joining us. I hope you enjoy what I know will be an informative and 

robust discussion.