The Florida Office of Attorney General is continuing to pursue its investigation into the “free” ringtones industry. As we’ve previously discussed in this column, Azoogle Ads made news with its $1M settlement with the Attorney General. If you recall, that settlement made it clear that the investigations weren’t over and that the OAG intended to use the $1M to fund its ongoing investigation of web publishers and wireless carriers.
More recently, on November 15, 2007, according to a press release from the Florida OAG:
Attorney General Bill McCollum today announced that his office has sued an internet marketing company, alleging it was engaging in blatantly deceptive business practices and cramming charges onto consumers’ wireless phone bills. Buongiorno, which calls itself one of the world’s largest enabler of digital mobile entertainment, could be facing civil penalties for adding monthly charges to wireless bills even though consumers are unaware that they have purchased or agreed to purchase cell phone content.
These cases evolved out of the allegedly misleading use of the word “free” in internet advertising. And the use of the word “free” is attracting authorities far beyond the Florida state line. The FTC recently went on the offensive against Aderactive, accusing them of misleading use of the word “free” in their subject lines. Ultimately, settlement cost $650,000 and contained the usual restrictions on bad future behavior.
All of these cases, and the many others that are currently under investigation, to some extent all revolve around the misleading use of the word “free.” We’ve been discussing that topic in this column for quite awhile. We should expect to see the net get drawn even more tightly around this issue in the next year, so it’s good to understand where we are headed.
Remember, when making ``Free'' or similar offers, all the terms, conditions and obligations upon which receipt and retention of the ``Free'' item are contingent should be explained clearly and conspicuously at the outset of the offer. It needs to be done in a way that it’s virtually impossible the terms of the offer would be misunderstood.
Stated simply, all material terms, conditions and obligations should appear in close conjunction with the offer itself. Asterisks which lead to lightly colored text at the bottom of a white page definitely won’t do. Any material terms and conditions should be clear and conspicuous.
Use your common sense; you know when someone is trying to hide terms and conditions and when they’re not. Act on your instinct, refuse to run ads where material terms and conditions are not “clear and conspicuous,” and you’ll stay clear of the coming FTC or AG enforcement actions.
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