Advertiser Responsibility for Third Party Statements: Beware of Bulletin Boards and Links on the Internet


The Internet presents novel issues with respect to advertiser responsibility for third party claims made via bulletin boards, chat rooms, web sites connected by links or frames and other interactive multimedia applications made available on the advertiser site, issues that are not applicable to "static" media such as print and broadcast. Advertisers are under similar obligations with respect to the information they provide to consumers in traditional media and on their web sites. Traditional advertising laws apply online, and thus the extent of an advertiser's obligation with respect to information it provides consumers depends on several factors, including the type of information being conveyed and the purpose of conveying the information (e.g., promotional, educational, speech). For example, the joint FTC/FDA crackdown on Internet nutritional supplement advertising dubbed OperationCure.All has targeted numerous companies offering products such as St. John's Wort, shark cartilage and colloidal silver which claimed, without the necessary support, that such products had the ability to cure diseases including AIDS and cancer. Some aspects of these challenges are no different from challenges in the offline media, but other aspects are unique to the ability of the Internet to connect simultaneous electronic communications paths into a seamless whole.

Bulletin Boards

As a general matter, the Communications Decency Act ("CDA") protects the Web site operator that qualifies as an "interactive computer service" from liability arising from information provided by third parties or statements made by third parties on its Web site. One major issue that arises with respect to bulletin boards is the point at which the involvement of the advertiser in its bulletin board places additional obligations on the advertiser and/or removes any protection the CDA may have afforded to the advertiser as the site operator? If the site operator has created a "black border" dividing line between the bulletin board and the commercial aspects of the site and does not monitor, moderate or participate in chat other than to remove material alleged to be infringing or defamatory, the CDA and First Amendment should insulate the advertiser from liability.

It is not clear, however, how far this "safe harbor" extends. If the seller of nutritional supplements proposes topics for discussion on its bulletin board (such as "Have you tried our nutritional supplements?"), has it stepped outside the safe harbor or does the site operator risk liability only if the discussion topic it proposes goes further in eliciting endorsements or testimonials? What if the advertiser also drops a link to its order form or list of stores next to the bulletin board enabling consumers to purchase the nutritional supplements being discussed? There is an argument in these instances that the "black border" has been compromised and the bulletin board deserves less CDA or First Amendment protection because the chat is now more akin to commercial speech by the site operator as advertiser.

There is a point where the involvement in or the execution of the bulletin board may render the advertiser responsible for statements made by third parties on its bulletin board, but this is not clearly defined in any statute, case law or enforcement actions to date. Once this point is reached, however, it does notmatter that the testimonial represents the honest opinion of the endorser - the site operator may be subject to liability if it does not have appropriate scientific evidence to back up the underlying claim. Furthermore, if the statement is found to be a testimonial, the advertiser may be obligated to place a disclaimer regarding the limited applicability of the endorser's experience when compared to what consumers may generally expect to achieve when using the product.

Finally, is the disclosure requirement satisfied if the disclaimer appears only in the site Terms and Conditions? Even if consumers are required to assent to the Terms and Conditions prior to accessing the bulletin board, such a disclaimer is hardly considered "clear and conspicuous", as required, since it appears nowhere near the advertising claims and is likely to be long forgotten if ever read by the site user.

Links

Advertisers must also be circumspect when linking to or framing third party sites. Depending on how the link is presented to the consumer, the advertiser may be held responsible as if it were the publisher of the information on the third party site.

The FTC, In the Matter of Michael D. Miller, Notice of Proposed Consent Agreement, brought an action against the operator of a Web site that manufactured, advertised and offered for sale Essiac Tea. In addition to allegedly unfounded claims made on its own Web site, links to third party sites were provided as a way for consumers to validate the medical claims. In one example the advertiser presented the links as follows:

"Essiac tea has not been approved by the United States FDA, and we are therefore not able to comment about any specific illness. But there are websites on the Internet which do not sell Essiac, and are therefore able to more directly address questions about specific illnesses. On the left sidebar are several websites which we recommend [sic] which may be able to assist you if you seek such answers. If, after reading about this famous Indian [sic] herbal remedy, you decide to buy some of Rene Caisse's herbal tea, I hope that you will remember us, and will return to this website to buy your herbal remedy."

In addition to being held responsible for any misleading information provided via the link, the FTC took the position that Mr. Miller's Natural Heritage Enterprises Web site deceptively represented that the linked sites were independent, when in fact those sites were materially connected with and created by Natural Heritage Enterprises.

While the facts of In the Matter of Michael D. Miller raise serious issues of false and misleading advertising on the part of the advertiser, any company utilizing links in good faith to better educate consumers about its products must also be cautious. Placing a link to a third party Web site may, depending on the product, render the advertiser subject to the FDA labeling requirements, as well as to FTC oversight of advertising under Section 5 of the FTC Act. Section 201(m) of the Food, Drug and Cosmetic Act defines "labeling" as "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article at any time while a device is held for sale, after shipment or delivery for shipment" (emphasis added). By offering its product for sale on its Web site, any information accompanying the product on the site via links may be subject to the labeling requirement.

In January 2001 the FDA issued a warning letter to Ocean Spray Cranberries Inc. ("Ocean Spray") threatening to take action against the company unless it modified its product descriptions on its Web site even though the products could not be purchased over the site, but only from grocery stores. The FDA alleged that Ocean Spray made unfounded claims on its site, which linked certain ingredients found in its products to the prevention of diseases. In response to the warning letter, the Washington Legal Foundation ("WLF") lodged a petition with the FDA to "adopt a rule, policy or guidance stating that information presented or available on a company's Web site, including hyperlinks to other third party sites, does not constitute "labeling" as defined by the Act." The FDA declined to adopt the policy advanced by the WLF, instead stating that it would "proceed on a case-by-case basis in determining what is labeling." In December 2001 the FDA issued a warning letter to Forever Young for arthritis pain relief claims on its site.

In a public statement, Margaret Dotzel, FDA Associate Commissioner for Policy, has taken the position that where information about a product's benefits appears on a Web site from which the product can be purchased, the Web site content constitutes written or graphic printed material designed to explain the use of the product at its point of distribution - the statutory definition of labeling. This leaves open the labeling issue for advertising only sites.

Even a link to an article or scientific study on a third party Web site may trigger the labeling requirement. Normally, Section 5 of the Dietary Supplement Health and Education Act exempts scientific journals, articles, books and other publications used in the sale of products from the labeling requirements. This exemption, however, only applies if the materials, among other things, are physically separate from the products being sold. If the link to such a publication is on the same web page as the site order function where the product can be purchased, the advertiser runs the risk of being subject to both FTC advertising rules and FDA labeling requirements. Links in ecommerce sites where products can be purchased online clearly raise more issues than links on passive advertising sites, but even the latter can raise issues at the FTC if not the FDA.

As with the placement of editorial content within a primarily commercial publication, an advertiser should clearly separate its product advertising and ordering content from third party statements made on its bulletin board, as well as from its links to third party site content, assuming it cannot independently substantiate what is said there.