Attorney General Martha Coakley Announces Amendments to Retail Advertising Regulations Effective January 4, 2010
"The advent of Internet advertising has brought many changes to the marketplace, making it necessary for our office to take a hard look at how the old regulations could be streamlined and modernized to reflect this new advertising landscape," said Attorney General Coakley. "These amendments were designed to ensure that consumers understand what is being offered in a business transaction, while offering the business community more clarity on what is expected of them with respect to their advertising practices."
The proposed amended regulations were originally filed with the Secretary of State's Office in January 2009, followed by public hearings on February 18 and 19, 2009, in Boston and Springfield, respectively. The proposed amended regulations were further revised after receiving comments from retailers, consumer advocates and the Office of Consumer Affairs and Business Regulation.
In 1990, the Attorney General's Office issued regulations under the Consumer Protection Act that identified certain unfair or deceptive conduct in the business of retail advertising. These regulations have served to guide the industry in their marketing practices in the Commonwealth since then.
In recent years, however, there have been many changes in retail sales technologies, including the advent of Internet advertising and sales. These changes, and investigations of some advertising practices conducted by the Attorney General's Office, have resulted in proposed amendments to update the regulations to reflect the current marketplace. After collecting testimony at the hearings and written comments on the proposed revised regulations, the Attorney General is issuing final revised regulations that will become effective January 4, 2010.
Some of the changes include:
- The definitions of "advertisement" and of "clear and conspicuous" were amended to make it clear that the regulations apply to advertising over the Internet. The current regulations make reference only to print, television and radio advertising.
- The revised regulations also make clear that video advertisements on the Internet conform to the requirements for video advertising on television, with minimum time requirements for disclosures (at least one second for each three words of the material representation, but in any event, not less than a total of 5 seconds).
- The "price comparison" section of the regulations was modified to ensure that price comparisons are not made to prices that were not previously offered. The revised regulations put an emphasis on comparisons that take into account the actual price at which the seller offered the products to the public and sets forth a series of factors to ensure that price comparisons are not made to prices that were never offered.
With respect to price comparisons, the revised regulations also added a section that provides sellers the following safe harbors for sales claims: 1) during the six months preceding the dissemination date of an advertisement of a price comparison, the former price was charged with respect to 40 percent of sales of the item; 2) the former price was offered openly and in good faith for the 14 days immediately preceding the dissemination date of the advertisement of a comparison price; or 3) a former price qualifies as a former price if the former price was offered for at least 28 days during the 90 days immediately preceding the price comparison advertisement, or during any other 90 day period, provided the advertisement clearly discloses the date, time, or seasonal period of such offer.
The amendments to the retail advertising regulations are part of Attorney General Coakley's regulatory review initiative announced with Governor Deval L. Patrick in October 2007, in which they undertook a joint effort to review regulations of the Commonwealth that are unnecessary, outdated, overly burdensome or inconsistent with statutory mandates and serve as undue hindrances to economic investment and development. The goal of the initiative is to promote a favorable regulatory environment that improves the business climate in the Commonwealth while still protecting consumers, employees, and a clean environment.
Copies of the revised regulations are available on the Attorney General's web site at www.mass.gov/ago/regulations.