Deceptive Advertising. The FTC Act also governs deceptive practices in advertising, including direct-mail communications. The Act requires businesses to use truth-in-advertising, meaning that: 1) the advertising must be truthful and not deceptive; 2) the advertisers must have evidence to back up their claims; and 3) the advertising must be fair, or not likely to cause substantial consumer injury. In determining whether an advertisement meets these criteria, the FTC will consider both the express and implied claims made by the advertisements, and information that is omitted. Penalties for a violation of the Act include cease and desist orders, civil penalties, and corrective advertising. FTC Online Behavioral Advertising Principles The FTC’s Online Self-Regulatory Principles For Behavioral Advertising appear in a report that was prepared by the FTC staff in 2009. These principles apply to website operators that engage in behavioral advertising (also called contextual advertising and targeted advertising). While compliance with the principles is voluntary, many companies adopt them as best practices. The FTC report and principles suggest ways that businesses using online advertising can protect consumer privacy while collecting information about their online activities. According to these principles website operators that collect or store consumer data for behavioral advertising purposes must do the following: • provide reasonable security for that data; • retain data for only the time necessary to fulfill a legitimate business or law enforcement need; • disclose to consumers their data collection practices tied to online behavioral advertising; • disclose that consumers can opt-out of (that is, say “no” to) these practices;
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