Specific Issues in Applying Certain Rules and Guides to Internet Activities

A. It’s Not Just Paper Anymore

Some Commission rules and guides use certain terms—such as "written," "writing" and "printed"—that connote words or information on paper. With the increasing use of computers and other electronic devices, that meaning is changing. In addition, thanks to email, businesses are no longer limited to using traditional communications vehicles like mail or the telephone to comply with rule or guide requirements to notify consumers.

1. Rules and Guides that Use the Terms "Written," "Writing" or "Printed"

Many rules and guides use the terms "written," "writing" and "printed," but in different ways. Some apply to written ads or transactions, using the term written to connote visual text. Others require information to be disclosed in writing, signaling the importance of text and the ability to retain and refer to the information more than once. Because each term must be analyzed within the context of the rule and guide itself, the Commission will continue to examine the exact nature of how these rules and guides apply to the paperless world of e-commerce and online advertising on a case-by-case basis and through periodic rule and guide reviews.²⁸

For the most part, however, Commission rules and guides that use the words "written," "writing" and "printed" will apply online. In many cases, an Internet ad that uses visual text is the equivalent of a "written" ad. Consumers expect to receive the same information and protections whether they’re looking at a paper catalog or an online one. For example:

• Claims "in writing . . . or in any broadcast advertisement" about an appliance’s energy use or efficiency must be tested in accordance with the Appliance Labeling Rule. ²⁹ Common sense dictates that this includes online claims. An energy use claim presented in visual text on a Web site should be treated the same as a claim in a print ad.

• If certain information about energy efficiency must be provided in "printed" catalogs featuring appliances, ³⁰ the information also should be provided online. There are no more constraints to providing this information on a Web site than there would be on paper.

2. Using New Technologies to Comply with Rules & Guides

As more activities and transactions take place online, businesses are using email to communicate with their customers. In some cases, email may be used to comply with a rule or guide requirement to provide or send required notices or documents to consumers. A key consideration for choosing this method of delivery is whether consumers understand or expect that they will receive important information by email. In addition, information should be provided in a form that consumers can retain, either by saving or printing. Here are examples of how these considerations apply to particular rules:

• If a seller cannot ship goods ordered by mail, telephone, or computer within the time promised (or otherwise 30 days), the seller must inform consumers of the delay and give them the option to agree to the delay or cancel the order and get a refund.³¹ Sellers are not required to use a particular method to send delay notices and online merchants may use email to send these notices. Consumers often provide their email address as part of an online order form. It may make good business sense for a seller to tell consumers that they plan to send any delay notices to that email address. This information may be added to an online order form without substantial cost or difficulty and may alert consumers that future communications about the order will occur online.

• Online sellers of negative option plans—such as book-of-the-month clubs—also may use email to communicate with consumers. With these plans, sellers send announcements that identify the merchandise that will be shipped and billed for that month unless the consumer declines by a certain date.³² These monthly notices are an important part of the plan. If consumers don’t understand that notices are sent by email, they may not respond and may incur charges for merchandise they don’t want. Because sellers are required to clearly and conspicuously disclose the material terms of the plan in their promotional materials, they should clearly inform consumers about how the notices will be sent before consumers enroll in the plan.

• Sellers that offer written warranties on consumer products must include certain information in their warranties and make them available for review at the point of purchase.³³ Warranties communicated through visual text on Web sites are no different than paper versions and the same rules apply. The requirement to make warranties available at the point of purchase can be accomplished easily on the Internet. For example, Internet merchants may use a clearly-labeled hyperlink such as "click here for warranty information" to lead to the full text of the warranty. Because consumers may need to refer to the warranty while comparison shopping or after the purchase, the warranty should be presented in a way that is capable of being preserved, either by downloading or printing. This is especially important if a paper warranty is not included with the product.

B. Direct Mail Solicitations Online

"Direct mail" solicitations generally refer to promotional materials that consumers receive through traditional mail. With technological advances, these kinds of solicitations have moved online.

Although the Telemarketing Sales Rule applies largely to telemarketing calls from business-to-consumer, it also applies to telephone calls the consumer places in response to a "direct mail" advertisement.³⁴ As with direct mail sent by traditional means, email can convey the false impression that the recipient has been "specially selected" for an offer not available to the general public. That impression may be exploited in a telemarketing call, particularly if the direct mail piece omits important information about the products or services offered. Therefore, if an email invites consumers to telephone the sender to purchase goods or services, the phone call is subject to the Telemarketing Sales Rule³⁵—as is the subsequent sale.

Not all online advertisements are considered "direct mail" solicitations. Consumers who view most Web sites, newsgroups, or electronic bulletin board postings are likely to understand that the goods or services are being offered on the same terms and conditions to all consumers—and that they haven’t been "specially selected" for the offer. Like television and newspaper advertisements, Web sites generally, newsgroups, and electronic bulletin board postings are different forms of advertising than "direct mail."³⁶ Telephone calls placed in response to these types of ads would generally be exempt from the Telemarketing Sales Rule.³⁷

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