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Federal Trade Commission Lays Out New Rules for Native Advertising

Photo: Topshop Holiday Campaign

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The Federal Trade Commission issued an enforcement policy statement yesterday addressing native advertising and branded content on the Internet in an attempt to reign in deceptive ads. The FTC laid out principles for native advertising, and WWD reports that companies who don't use "clear and prominent" disclosures in branded ads and are found in violation of the enforcement order could possibly be fined millions of dollars.

"The FTC’s policy applies time-tested truth-in-advertising principles to modern media," said Jessica Rich, director of the Bureau of Consumer Protection said in a press release. "People browsing the Web, using social media, or watching videos have a right to know if they’re seeing editorial content or an ad."

Native advertising has become part of the media industry landscape, and as Re/code notes, publications from Condé Nast to BuzzFeed to Vox Media (which owns Racked) have set up in-house ad agencies to create branded online content for advertisers. The FTC's rules on creating clear boundaries between ads and content aren't always observed: a popular Lord & Taylor campaign with Instagrammers this spring made headlines for violating FTC guidelines for digital advertising.