Advertising in the United States is governed by federal, state and local laws, as well as agency regulations and industry self-regulatory standards. The principal laws include the following.

• The Federal Trade Commission Act (the “FTC Act”) – Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices”, is the primary federal consumer protection statute, upon which most federal advertising enforcement is based. Advertisers must generally ensure that claims are truthful, not misleading and adequately substantiated.
• State consumer protection laws – every state has laws that prohibit deceptive, unfair or misleading practices, often referred to as Unfair and Deceptive Acts and Practices (UDAP) statutes.
• The Lanham Act – Section 43(a) of the Lanham Act provides a private right of action for competitors harmed by false or misleading advertising. Competitors may seek injunctive relief and damages for advertising that misrepresents the nature, characteristics, qualities or origin of goods or services.

Depending on the product or service being advertised, other laws may also apply. For example, the Federal Food, Drug, and Cosmetic Act (FDCA) applies to products regulated by the Food and Drug Administration (FDA), including foods, drugs, medical devices, cosmetics and certain other regulated products.

The Federal Trade Commission (FTC) is the primary enforcer of the FTC Act, and state attorneys general are the primary enforcers of state UDAP statutes. In some jurisdictions, UDAP statutes also provide private rights of action.

Depending on the product or service advertised, other regulatory authorities may have enforcement rights. For example, the FDA may have authority if ads involve foods, drugs, medical devices, cosmetics or certain other products.

The remedies available to regulators vary by statute but may include injunctive relief, restitution, disgorgement, other equitable relief (such as corrective advertising), damages and penalties.

Any person or entity that participates in creating, disseminating or approving deceptive advertising may face liability, depending on the facts. This includes advertising agencies and others who help prepare claims they know, or should know, are false or misleading. Corporate officers, directors, owners and other individuals may also be held personally liable if they directly participate in deceptive practices or have authority to control them and possess the requisite knowledge.

Advertising generally encompasses any commercial speech that promotes, directly or indirectly, the sale of goods or services, or that otherwise influences commercial decisions. Although the line between commercial speech and non-commercial speech is not always clear, regulators and courts have determined that “advertising” extends beyond traditional ads to include social media posts, influencer marketing, endorsements, native advertising, branded content, promotional emails, websites, product packaging and other communications that convey a commercial message.

Most advertising does not require pre-approval from government or other authorities, although certain materials in regulated industries – such as drugs, alcohol and gambling – may require pre-approval.

No uniform law governs the use of an individual’s name, picture, voice or likeness in advertising. Instead, a patchwork of state statutes and common law doctrines applies, varying significantly in scope, remedies and duration. Generally, advertisers may not use a person’s identity for advertising, endorsement or other commercial purposes without consent, and many states extend those rights after death. Recent legislation in states such as California, New York and Tennessee has expanded publicity right protections to address AI-generated digital replicas, voice cloning and other synthetic uses of an individual’s identity.

The National Advertising Division (NAD –a programme of BBB National Programs) is the principal advertising self-regulatory body in the United States. The standard NAD process is straightforward:

• the challenger files a challenge;
• the advertiser responds;
• the challenger may file a reply; and
• if so, the advertiser can file a final response.

Both parties can meet separately with NAD staff. There is no discovery which helps relieve participants of many of the costs and disruptions associated with litigation. In 2020, NAD launched a “Single Well-defined Issue Fast Track” (SWIFT) for certain single-issue cases, and a Complex Track for more complicated cases, each differing slightly from the standard process.

NAD cannot award monetary damages, impose fines nor issue injunctions. Instead, if NAD concludes that a claim is not supported or misleading, it will recommend that the advertiser discontinue or modify the claim. Compliance is voluntary, but most advertisers participate and follow NAD’s recommendations. If an advertiser refuses to participate or comply with a final decision, NAD may refer the matter to the appropriate government agency, such as the FTC, for possible enforcement action.

The Children’s Advertising Review Unit (CARU – also a programme of BBB National Programs) has established guidelines for advertising to children under 13; see 3.2 Children for more detail. CARU monitors child-directed advertising and privacy practices, investigates advertising on its own initiative or in response to complaints, and issues decisions. As with NAD, if a company fails to comply with CARU’s recommendations, CARU may refer the matter to an appropriate government agency for possible enforcement action.

Consumers cannot sue directly under the FTC Act, but many state UDAP statutes provide a private right of action to challenge deceptive or unfair advertising, with remedies that may include actual damages and statutory damages, injunctive relief and, in some cases, attorneys’ fees. Consumers may also pursue common law claims such as fraud, negligent misrepresentation or breach of warranty, depending on the circumstances.

The most important legal trends over the past 12 months regarding deceptive advertising include the following.

• Automatic renewals have been an active area for regulators at the federal and state levels. In March 2026, the FTC issued a new Advance Notice of Proposed Rulemaking to revisit its Rule Concerning the Use of Prenotification Negative Option Plans, which would regulate various types of subscriptions. In the meantime, more states have added to the patchwork of regulations. There has also been increased enforcement at the federal and state levels, including a USD35 million settlement in an FTC investigation.
• States continue to focus on how companies advertise prices and fees. A growing number of states are passing laws that require companies to clearly disclose the total price of a product or service upfront, including all mandatory fees; the laws generally only allow advertisers to exclude taxes, shipping costs and optional fees. Even states without specific laws can challenge pricing practices under general UDAP laws.
• Following a Washington Supreme Court decision in April 2025 that expanded the scope of the state’s anti-spam law, plaintiffs filed more than 100 suits alleging that retailers used misleading email subject lines regarding sales and promotions. These lawsuits frequently claim that the retailers created a false sense of urgency about the promotions. Similar lawsuits are starting to be seen in other states. Most of these cases are still pending.

Laws do not generally address taste or cultural concerns. However, in 2022 NAD expanded its mandate to include “resolving complaints or questions concerning national advertising that is misleading or inaccurate due to its encouragement of harmful social stereotyping, prejudice, or discrimination”. Similarly, CARU updated its guidelines to require that ads directed to children under 13 do not portray or encourage negative social stereotyping, prejudice or discrimination.

Legislators and enforcers on both the federal and state levels have been concerned with “affordability” issues. As a result, there has been increased focus on issues that affect consumers’ wallets. For example, as noted in 1.9 Regulatory and Legal Trends, there has been an increased focus on price transparency and automatic renewals. In addition, the FTC has been focused on claims that products are “Made in USA”, with the FTC Chairman even designating July as “Made in USA” Month in 2025. Since then, the FTC has initiated various enforcement actions.

An advertising claim will generally be deemed deceptive if a representation, omission or practice is likely to mislead reasonable consumers acting reasonably under the circumstances and is material to their purchasing decisions. Ads are evaluated based on their overall net impression, including both express and implied claims. Advertisers must possess adequate substantiation for objective claims before dissemination, and any disclosures necessary to prevent deception must be presented in a clear and conspicuous manner. Both affirmative misrepresentations and material omissions can give rise to liability.

Advertisers are generally responsible for every objective claim in their ads. This requirement applies to express claims and to implied claims, even if the advertiser did not intend to convey the implied claim. An ad can be literally true, but can still be misleading if it conveys a claim that an advertiser cannot support.

Whether an ad conveys an implied claim is sometimes determined through a consumer perception survey. Generally, if more than 20% of consumers take a claim away from an ad, the advertiser must be able to support that claim. In the absence of a consumer perception survey, the entity reviewing the ad may step into the shoes of consumers and determine what claims the ad is likely to convey.

“Puffery” generally refers to obvious hyperbole, exaggerated displays of an advertiser’s pride, and other non-measurable claims. Advertisers are not required to have a reasonable basis to substantiate statements that constitute puffery. Context is important. A statement that may constitute puffery in one context (and thus not require substantiation) may be considered an objective claim in another context (and thus require substantiation).

Advertisers are generally required to have a “reasonable basis” to support objective claims in their ads before those ads are disseminated. In general, what constitutes a reasonable basis for a claim depends on:

• the type of product;
• the type of claim;
• the consumer benefit from a truthful claim;
• the ease of developing substantiation for the claim;
• the consequences of a false claim; and
• the amount of substantiation experts in the field believe is reasonable.

The last factor is typically the most important.

In some instances, companies may be subject to heightened standards. For example, health claims may require “competent and reliable scientific evidence” to substantiate the claims, such as well-controlled human clinical studies.

Product demonstrations should generally depict products under typical consumer use conditions and in accordance with the product instructions. Advertisers should ensure demonstrations accurately reflect how the products perform in real life, and should use caution when editing or enhancing those demonstrations in a way that can exaggerate performance. At minimum, any material edits or enhancements should be clearly disclosed.

The FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (the “Endorsement Guides”) are intended to ensure that endorsements, testimonials, influencer posts, reviews and similar content are truthful and transparent. Key requirements include the following.

• An endorsement must reflect the endorser’s genuine opinions, beliefs, findings or experience with a product or service.
• An advertiser cannot use an endorsement that communicates a claim that would be false, misleading or unsubstantiated if made directly by the advertiser.
• If there is a connection between the advertiser and the endorser that consumers would not reasonably expect, that connection must be disclosed in a clear and conspicuous manner.
• Disclosures should generally appear close to an endorsement and should not be hidden behind links, buried in hashtags or placed where consumers are unlikely to notice them.
• Endorsements should generally communicate results that are representative of what consumers can typically expect to achieve. If the results are not typical, the ad must clearly communicate the generally expected results.

The FTC’s Green Guides explain how truth-in-advertising principles apply to environmental marketing claims. Key principles include that:

• advertisers must possess competent and reliable supporting evidence for environmental claims to ensure that they are truthful, substantiated and not misleading;
• advertisers should avoid broad, unqualified claims such as “green”, “eco-friendly” or “environmentally friendly”, which consumers may interpret as sweeping benefits that are difficult to substantiate; and
• advertisers should qualify claims clearly and conspicuously to communicate the specific environmental benefit.

The Guides provide detailed guidance on specific claims, including recyclable, recycled content, compostable, degradable, renewable materials, renewable energy, carbon offsets and free-of claims. The Guides also address environmental certifications and seals of approval, warning that they can imply broad environmental benefits unless qualified and substantiated. Advertisers must disclose material connections with certifying organisations.

The Green Guides were last revised in October 2012. Although the FTC initiated a regulatory review and accepted public comments on proposed updates to the Green Guides in 2023, the Commission has yet to release a new version.

If a disclosure is necessary to prevent an ad from being misleading, it must be “clear and conspicuous”. What constitutes “clear and conspicuous” will depend on the context, but a disclosure should generally:

• appear close to the claim it modifies;
• be in a location where consumers are likely to see it;
• be sufficiently large and contrast with the background so that it is easy to read; and
• use words the audience is likely to understand.

In some contexts, such as the Endorsement Guides, the FTC has also stated that disclosures should be “unavoidable”.

“Made in USA” claims have received a lot of attention recently. To comply with the FTC’s standards, companies should not make unqualified “Made in USA” claims, nor otherwise imply that a product is made in this country, unless “all or virtually all” of a product is made in the United States. This generally means that:

• the final assembly or processing of the product must take place in the US;
• all significant processing that goes into the product must take place in the US; and
• all or virtually all ingredients or components must be made and sourced in the US, so that the product contains no – or negligible – foreign content.

The FTC evaluates several factors to determine whether a company has complied with the standard, including:

• the proportion of total manufacturing costs attributable to US parts and processing;
• how far removed any foreign content is from the finished product; and
• the importance of foreign content to the product’s form or function.

Companies that cannot make unqualified claims may be able to qualify them by providing more context. For example, a company may advertise that a product is “Made in USA of US and imported parts”. Of course, the claim should not mislead consumers about the amount of US content or processing. For example, a claim that a product includes “US parts” could be misleading if the value of those parts is negligible.

Laws do not generally address issues of stereotyping, diversity or equity, but as noted in 1.10 Taste and Cultural Concerns, both NAD and CARU have expanded their guidelines to address harmful social stereotyping, prejudice and discrimination in advertising generally and in advertising directed to children under 13.

CARU’s “Self-Regulatory Guidelines for Children’s Advertising” are based on the principle that advertisers have special responsibilities when marketing to children under 13, who may not fully understand advertising’s persuasive intent or be able to critically evaluate marketing claims. The Guidelines require that such ads be truthful, substantiated and presented so the target audience can understand them, and do not mislead children about a product’s performance pr benefits, or what is included with a purchase. Material disclosures must be clear, simple and conspicuous. The Guidelines also emphasise transparency in influencer marketing and endorsements, including disclosure of material connections and genuine endorsements, and require advertisers to clearly distinguish advertising from editorial or entertainment content so children can recognise ads.

The Guidelines also seek to protect children from unfair pressure and inappropriate content. They prohibit advertising that exploits children’s immaturity, encourages them to pressure parents to make purchases, creates unrealistic expectations about contests or loyalty programmes, or uses manipulative tactics in apps and games. Online sales features must clearly indicate when real money is being spent and require parental involvement. Advertisers must also promote safe product use, avoid depicting dangerous behaviour, and refrain from advertising products that are inappropriate for children. More broadly, CARU encourages advertising that respects diversity, avoids stereotypes, and supports children’s healthy development while preserving the parent-child relationship.

In 2022, the FTC issued “Bringing Dark Patterns to Light”, a report which warns advertisers against engaging in online design practices that trick or manipulate consumers into making choices they would not otherwise have made or that would cause them harm. The FTC identified four key types of dark patterns:

• design elements that induce false beliefs, such as ads disguised as editorial content, comparison sites that claim to be neutral but rank results based on compensation, and claims that create a false sense of urgency;
• design elements that hide or delay material information, such as burying material terms in dense disclosures, drip pricing (revealing mandatory fees late in the purchase process), and using icons, hyperlinks or hover-overs to hide key terms;
• design elements that lead to unauthorised charges, including pre-checked boxes, negative option programmes with inadequate disclosure, confusing cancellation processes, and subscription flows requiring multiple steps to cancel despite one-click enrolment; and
• design elements that obscure or subvert privacy choices, such as default settings maximising data collection, cookie banners making “accept” easier than “reject”, interfaces repeatedly pressuring consent, and privacy settings that are hard to find or understand.

The FTC and state regulators have included allegations that advertisers have engaged in dark patterns in enforcement actions. Private plaintiffs have also cited the FTC’s report in class action lawsuits.

When a brand pays or provides consideration for content that appears on broadcast media, the Federal Communications Commission (FCC) generally requires viewers or listeners to be told that the content is sponsored and who the sponsor is. In other media, the FTC guidance outlined in 3.5 Special Rules for Native Advertising is likely to apply.

In 2015, the FTC released two documents – an “Enforcement Policy Statement on Deceptively Formatted Advertisements” and “Native Advertising: A Guide for Businesses” – to address native advertising, which is defined as online content “that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it”. The key points are as follows.

• Ads must be identifiable: advertising is deceptive if it misleads consumers about its commercial nature or source. This applies to all formats, including sponsored articles, recommendation widgets, videos, paid social media and advertiser-created content resembling journalism.
• Net impression standard: the FTC evaluates the overall impression of an ad based on its appearance, placement, design and context, not just its words. Native advertising is deceptive if consumers are likely to believe it is independent editorial content rather than advertising.
• Clear and conspicuous disclosures: disclosures must be close to the content, easy to read, difficult to miss, and understandable. Labels like “Advertisement” or “Paid Advertisement” are more effective than terms like “Promoted” or “Partner Content”.
• Pre-click disclosures: if a headline, thumbnail or teaser appears to be independent editorial content, the disclosure must appear alongside it, not just on the landing page.

The basic principles outlined elsewhere in this chapter also apply to comparative claims. Advertisers need a reasonable basis for any express or implied claims about their own products or services, as well as those of their competitors. Because comparative ads are more likely to be challenged by competitors, they carry higher risk than ads that do not target a competitor. It is worth keeping the following additional tips in mind.

• When making comparative claims, advertisers should generally specify precisely what they are comparing in order to avoid making a broader claim than they can support.
• NAD has held that, when making unqualified comparative claims, advertisers must generally substantiate the claim against “all or a significant portion of competitive products on the market”. That has generally translated to 85% of the market.
• When comparing products, companies should compare products that are as similar as possible. If a company compares products that have material differences, they will need to clearly disclose those differences.
• Although the FTC and courts do not generally draw a distinction between claims that disparage competitors and claims that do not, NAD holds the former to a higher standard, stating that “claims that expressly or implicitly disparage a competing product will be carefully scrutinised to ensure they are truthful, accurate, and narrowly drawn”. Among other things, this means an advertiser cannot exaggerate the differences between it and a competitor.

Advertisers are generally permitted to use the name of a competitor, a competitor’s trade mark and a competitor’s packaging in comparative advertising, provided the use is truthful and not misleading, and does not imply sponsorship or endorsement.

Under Section 43(a)(1)(B) of the Lanham Act, advertisers may challenge false or misleading claims made by competitors in advertising. Available remedies include:

• injunctive relief;
• recovery of the plaintiff’s damages;
• disgorgement of the defendant’s profits;
• costs; and
• in exceptional cases, attorneys’ fees.

Advertisers can also challenge comparative claims at NAD; see 1.7 Self-Regulatory Authorities regarding the NAD process.

There are no laws specific to ambush marketing in the United States. Instead, ambush marketing is typically challenged under Section 43(a)(1)(A) of the Lanham Act and related state-law theories. These laws prohibit advertising that is likely to create consumer confusion regarding affiliation, sponsorship, endorsement or approval. Additional claims may arise under trade mark, unfair competition, contract and event-specific rights, particularly in connection with major sporting events and the Olympic Games.

In general, the same rules that govern advertising in traditional media also apply in social media. The FTC has issued guidance on how some of those rules may be applied in the context of social media advertising. For example, as discussed in 5.3 Disclosure Requirements, the FTC has issued guidance on how advertisers can make disclosures in social media, and as described in 5.5 Influencer Campaigns and Online Reviews, the FTC has issued guidance on influencer campaigns.

Section 230 of the Communications Decency Act generally provides that online platforms and other “interactive computer services” cannot be treated as the publishers or speakers of content created by third parties. As a result, social media platforms, review sites, online marketplaces and other websites are typically shielded from civil liability arising from user-generated content, even when they make editorial decisions about whether to publish, remove or moderate that content. These websites may, however, be liable if they play a role in creating problematic content.

In 2013, the FTC issued “.com Disclosures: How to Make Effective Disclosures in Digital Advertising”, emphasising that the same clear-and-conspicuous principles that apply in traditional media apply online. The guidance addresses factors such as:

• placing disclosures close to the relevant claim;
• making them prominent;
• avoiding distracting elements;
• repeating disclosures when necessary;
• ensuring audio and visual disclosures are understandable; and
• tailoring disclosures to all devices and platforms on which an ad may appear.

Although advertisers can sometimes make disclosures when space is constrained, the FTC cautions against doing so if the hyperlinked information is integral to the offer or necessary to prevent consumer confusion.

There are no general federal rules or regulations that apply to specific social media platforms. Although Congress enacted legislation that would have prohibited TikTok absent divestiture by its Chinese parent company, the app remains available in the US following a restructuring of its US operations and ownership intended to satisfy the law’s national security requirements.

The Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003 (the “CAN-SPAM Act”) establishes requirements for commercial email messages on the federal level. In general, senders must:

• ensure that the “From”, “To”, “Reply To” and routing information accurately identify the sender;
• ensure that the subject line accurately reflects the message content;
• identify the message as an ad;
• include a clear, conspicuous and easy-to-understand explanation of how recipients can opt out of future marketing emails; and
• honour opt-out requests within ten business days.

Each violating email is subject to penalties of up to USD53,088. The FTC is the primary CAN-SPAM enforcer, and there is no private right of action for email recipients. CAN-SPAM pre-empts state laws, except those prohibiting “falsity or deception in any portion” of an email. Some such state laws include a private right of action and statutory damages, and lawsuits under these laws have increased significantly in the past year in states like Washington.

Telemarketing calls are subject to numerous overlapping federal and state laws/regulations.

The most noteworthy of these is the federal Telephone Consumer Protection Act (TCPA). This law, along with extensive corresponding FCC regulations, restricts telemarketing calls made using an automatic telephone dialling system or artificial/prerecorded voice message unless the called party has given prior express written consent, and restricts marketing calls to numbers on the National Do Not Call Registry absent the subscriber’s prior express invitation or permission or an established business relationship with the caller. Consumers can revoke consent for telemarketing calls at any time using any reasonable means, and callers must honour such requests within a reasonable time, not to exceed ten business days. Artificial/prerecorded voice (including AI-generated) telemarketing calls must provide consumers with an automated opt-out mechanism that is usable during the call. The TCPA provides a private right of action under which plaintiffs can generally seek between USD500 and USD1,500 per call/text violation, and the FCC and states also have TCPA enforcement authority.

The other key regulation at the federal level is the Telemarketing Sales Rule (TSR), which is enforced by the FTC. The TSR requires sellers and telemarketers to make certain disclosures to consumers, and prohibits various deceptive and abusive telemarketing acts or practices. It also requires callers to honour do-not-call requests and maintain detailed records of compliance. The FTC can seek civil penalties of up to USD53,088 per violation.

In addition, individual states have their own telemarketing statutes that require specific disclosures, consent and opt-out obligations. Enforcement and potential penalties for violations vary state-by-state.

At the federal level, marketing text messages have generally been viewed as synonymous to calls, and subject to the same consent, disclosure and opt-out requirements as calls; penalties for TCPA or TSR violations arising from texts would be the same as calls. Recently, however, several federal district courts and at least one circuit court have found that text messages are outside the scope of the TCPA’s Do-Not-Call provisions. Several state telemarketing laws also expressly cover text message marketing/solicitations – in these states, consent, disclosure and opt-out requirements vary, as do enforcement mechanisms and penalties.

US state comprehensive privacy laws afford consumers a right to opt out of the processing of personal data for targeted advertising.

• The majority of these state laws define “targeted advertising” as “displaying ads to a consumer where the ad is selected based on personal data obtained from that consumer’s activities over time and across non-affiliated websites or online applications to predict such consumer’s preferences or interests”. Advertising on a controller’s own website or online application is not considered “targeted advertising”. Also, the processing of personal data solely for measuring or reporting advertising performance, reach or frequency is not considered “targeted advertising”.
• The California Consumer Privacy Act (CCPA) similarly affords an opportunity to opt out of the sale or sharing of personal information to a third party, including for cross-context behavioural advertising, which is the “targeting of advertising to a consumer based on the consumer’s personal information obtained from the consumer’s activity across businesses, distinctly branded internet websites, applications, or services, other than the business, distinctly branded internet website, application, or service with which the consumer intentionally interacts”.

The US state comprehensive privacy laws require consumers to be provided with privacy notices and a notice at collection that describe how businesses collect, use and may disclose personal information, including in the context of targeted advertising. In addition, the laws require data processing agreements (DPAs) to be entered into with service providers/processors that process personal information on behalf of a business/controller, and the CCPA requires entering into an agreement with any third party to which a business sells or shares personal information (including for cross-context behavioural advertising). The Interactive Advertising Bureau (IAB) has developed a Multi-State Privacy Agreement that harmonises these various opt-out, notice and contracting requirements, providing an important tool for publishers, advertisers and advertising technology vendors to comply with the US state privacy laws.

Private plaintiffs have leveraged a private right of action in state wiretap statutes, including the California Invasion of Privacy Act (CIPA), to bring actions against businesses that add third-party cookies, pixels, tags or other similar technologies to their websites. Businesses can take steps to mitigate risk, in co-ordination with privacy counsel, by ensuring the use of these technologies is clear and conspicuous and by offering consumers appropriate choices regarding the use of these technologies.

Under the federal Children’s Online Privacy Protection Act (COPPA), businesses are not permitted to engage in targeted advertising to children under the age of 13 without parental consent, which in practice is challenging to secure. As a result, in the US, most businesses do not use targeted advertising on websites or online services directed to children or where they have actual knowledge that a user is a child. Recently, state legislatures have enacted a patchwork of legal requirements that apply to targeted advertising to teens ages 13 to 17, including state comprehensive privacy laws, age-appropriate design code acts, social media and online safety laws, and child data protection laws. Many of these laws implement complete bans on targeted advertising to teens, while others allow such advertising with the consent of the teen.

COPPA does not permit an online operator of a website or online service directed to children under the age of 13, or such operator that has actual knowledge that a user is a child under the age of 13, to collect personal information from a child without obtaining verifiable parental consent. Many businesses avoid COPPA’s requirements by avoiding collecting personal information from children under the age of 13 on the internet, including for marketing purposes.

Businesses that wish to engage with child audiences will be required to:

• provide a direct notice to parents;
• provide a children’s privacy notice on their website;
• obtain verifiable parental consent;
• limit data retention of children’s personal information; and
• offer certain privacy rights to parents.

These requirements can be onerous, so businesses that engage with child audiences frequently avoid collecting personal information altogether. An exception to COPPA permits the collection of persistent identifiers for internal operations purposes identified in an operator’s children’s privacy policy, including, for example, to maintain or analyse the functioning of a website or online service or to serve contextual advertising on a website or online service.

The FTC and state attorneys general have sole authority to enforce COPPA. A violation of COPPA, like any FTC rule, carries significant maximum civil penalties of USD53,088 per violation (as adjusted for inflation as of February 2025).

Sensitive Data

Consider whether your advertising involves building profiles about individuals based on sensitive data, including health data, for example. This is a highly regulated space. The US state comprehensive privacy laws require the consent of the individual to process or collect sensitive data. Increasingly, states are tamping down on the use of sensitive data for marketing purposes. The Washington My Health, My Data Act requires written authorisation before engaging in a “sale” of consumer health data, which is understood to include engaging in targeted advertising. States like Maryland and New Jersey have also enacted full prohibitions on the sale of sensitive data to third parties, including health data. Some states, such as Oregon, have enacted full prohibitions on the sale of certain categories of sensitive data, like precise geolocation derived from a device.

Data Broker Laws

Consider also whether advertising use cases require compliance with an array of data broker laws. In California, as an example, a business is required to register as a data broker with the California Privacy Protection Agency if it is considered a data broker that “knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship”. Businesses should assess whether their purchase and use of third-party data for advertising campaigns triggers data broker registration obligations. Data brokers should consider whether the Protecting Americans’ Data from Foreign Adversaries Act (PADFAA) is applicable or restricts the sale of data to foreign adversaries (eg, China). Businesses should also assess whether the Department of Justice Bulk Data Rule imposes diligence or contracting obligations when engaging with a non-US vendor, to ensure data is not transferred to countries of concern (eg, China).

Sweepstakes and contests are governed by a patchwork of laws across the states, along with a few laws on the federal level. The key requirements are as follows.

• Federal and state lottery laws prohibit private parties from running lotteries. A lottery is generally defined as a promotion that includes the following three elements: (1) one or more prizes; (2) awarded by chance; (3) to entrants who were required to pay money or give other consideration. Companies must remove at least one of these elements for a promotion to be lawful.
• A company can offer a chance-based sweepstake that includes a method of entry that involves consideration as long as it also includes a free alternate method of entry, commonly referred to as an “AMOE”. In order for an AMOE to be effective, consumers who enter via the free method must have the same chances to win as those who enter via the paid method, and the free option must be clearly disclosed.
• Many states have statutes that regulate the types of disclosure that must be made when running a promotion. Under some of the more common statutes, a company will be required to disclose any restrictions on eligibility or on receiving a prize, the procedures for entering the sweepstakes and a description of each prize, including its approximate retail value, and the odds of winning. These are commonly grouped together in “Official Rules”.
• Some states also require companies to disclose material terms in ads for a promotion, such as who is eligible, deadlines and where to find the complete Official Rules.

Ads must also comply with requirements under general advertising laws.

Most states apply a “predominance” test to differentiate skill games from chance games. Under this test, a court will make a factual inquiry into whether skill or chance plays a greater role in determining the outcome of a game. If the dominant factor in determining the outcome is skill, the game will be deemed a game of skill; if the element of chance predominates in determining the outcome, the game will be deemed a game of chance. Other states have more stringent tests. For example, some states will consider whether chance plays a “material element” in the outcome.

Three states require companies to post bonds and/or register sweepstakes, in certain circumstances.

• Florida: if the total value of prizes offered in a sweepstake exceeds USD5,000, a company must register and post a bond at least seven days before the start of the sweepstake. The company must also file a list of winners within 60 days of the final determination of winners.
• New York: if the total value of prizes offered in a sweepstake exceeds USD5,000, a company must register and post a bond at least 30 days before the start of the sweepstake. The company must also file a list of winners within 90 days of the promotion’s end.
• Rhode Island: if the total value of prizes offered in a sweepstake conducted by a “retail establishment” exceeds USD500, a company must register with the state before running the sweepstakes. No bond or list of winners is required.

In order to offer a skill contest in which a purchase is required in Arizona, a company must register with the Attorney General’s office.

The FTC’s “Guide Concerning Use of the Word ‘Free’” requires companies advertising something as “free” to disclose all terms and conditions “clearly and conspicuously at the outset of the offer as to leave no reasonable probability that the terms of the offer might be misunderstood”. These terms must appear near the offer – a disclosure in a footnote will probably not suffice. In addition, a company cannot increase the price of an item that must be purchased to get something free.

The FTC’s “Guides Against Deceptive Pricing” address various kinds of pricing representations, including representations that a current price is a discount from a former price, comparisons to others’ prices and to manufacturers’ suggested retail prices, and representations about special prices based on the purchase of other products. The Guides also generally state that when a company makes a comparison to a former, higher price, the former price should be “the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time”. The Guides do not define what a “reasonably substantial period of time” means.

Various states have laws that could regulate how companies refer to former prices. These laws can vary significantly. For example, some states have a version of what is known as the “28/90 Rule”, under which the product must be offered at the regular (former) price for at least 28 days out of the immediately preceding 90 days on a rolling basis. Other states have different requirements. For example, in California, the former price must have been the “prevailing market price” within three months immediately preceding the reduced price offer. “Prevailing marketing price” is not defined. There has been a lot of litigation involving these laws in recent years.

The federal Restore Online Shoppers’ Confidence Act (ROSCA) requires companies offering automatic renewal or other “negative option” programmes online to:

• clearly and conspicuously disclose all material terms before obtaining a consumer’s billing information;
• obtain express informed consent to recurring charges; and
• provide a simple cancellation procedure.

In practice, the FTC generally expects disclosures to explain auto-renewal features, the amount and frequency of recurring charges, and how to cancel. It has brought enforcement actions against companies that obscure key terms, fail to obtain affirmative consent, or make cancellation unduly difficult.

More than half the states now have laws that apply to automatic renewals. These laws generally require companies to:

• disclose material terms upfront, including the price, the length of the term, that a subscription will continue until a consumer cancels, and the cancellation policy;
• ensure that the terms are presented in a clear and conspicuous manner;
• obtain affirmative consent from consumers before charging them;
• send confirmation emails with material terms;
• send reminder emails at specified intervals; and
• establish a mechanism that makes it easy for consumers to cancel.

State regulators and private plaintiffs have challenged companies for failing to meet these requirements.

The same laws that apply to ads generated without AI apply to ads generated with AI, meaning that companies must be able to substantiate all claims that reasonable consumers may take away from their ads and must clearly disclose any material terms.

A New York law requires companies to “conspicuously disclose” when their ads include any “synthetic performer”, which generally refers to an asset that was created using generative AI or a software algorithm and is intended to emulate an actual (but not identifiable) human. Other states are considering similar laws.

Several states have enacted laws addressing AI-generated replicas. For example, California, New York and Tennessee have adopted or expanded laws protecting individuals against unauthorised AI-generated reproductions of their voice, likeness or image, particularly in commercial and entertainment contexts.

The use of AI tools to generate ads can also raise intellectual property concerns. For example, copyright ownership of AI-generated material remains uncertain. The US Copyright Office takes the position that works created by non-humans, including AI, are not protectable. In addition, AI tools themselves may infringe third-party rights, or generate output that does. There are various pending lawsuits in which plaintiffs have alleged that AI companies’ data collection and training practices violate copyright laws.

In 2023, the FTC published a blog post that included guidelines advertisers should keep in mind when advertising the AI capabilities of their products. Although the blog post is no longer on the FTC site, the guidance is helpful.

• It is important to ensure that claims are factually accurate, that advertisers can support those claims, and that they disclose any material limitations.
• If advertisers claim that AI makes a product better than a product that does not use AI, they “need adequate proof for that kind of comparative claim”.
• Advertisers should think about the “reasonably foreseeable risks and impact of your AI product before putting it on the market”.
• Advertisers should remember that there is a difference between using an AI tool to develop the product and having AI in the product: “FTC technologists and others can look under the hood and analyse other materials to see if what’s inside matches up with your claims.”

NAD has issued various decisions analysing whether companies could support claims about AI-related capabilities.

In the absence of federal legislation, states are experimenting with an array of chatbot-specific regulations, including both general chatbots and chatbots specifically aimed at children, such as the California Companion Chatbots law (SB 243) enacted in 2025 or the Washington regulation of AI companion chatbots (HB 2225) enacted in 2026. Key themes include:

• disclosure of the use of artificial intelligence (ie, conveying to the consumer that they are engaging with AI and not a human);
• disclosure at least every three hours that reminds the user to take a break and that the chatbot is artificially generated and not human; and
• implementation of reasonable measures to prevent chatbots from claiming to be human, including when asked by the person interacting with the chatbot, and from otherwise generating output that refutes or conflicts with such disclosure.

States are also focused on protecting minors under the age of 18 when they engage with chatbots. For example, laws may require chatbot providers to institute reasonable measures to prevent chatbots from producing visual material of sexually explicit conduct or directly stating that the minor should engage in sexually explicit conduct.

Another theme is preventing self-harm. Chatbot operators should implement a protocol for preventing the production of suicidal ideation, suicide or self-harm content to the user. If a user expresses suicidal ideation or intent to self-harm, providers should take action, including notifying users to contact a crisis helpline.

States have also passed laws focused on preventing chatbots from providing guidance similar to licensed professionals. For example, laws in Illinois, Nevada, Rhode Island and Vermont place restrictions on the use of AI to deliver therapy services, and regulate how licensed therapists may use AI to provide their services.

General truth-in-advertising principles apply to the promotion of cryptocurrencies and NFTs. Given the volatility of digital assets and their sensitivity to market conditions, regulatory developments and technical failures, advertisers should avoid overstating benefits or omitting material risks, and should clearly and conspicuously disclose all material terms, including the nature of the asset offered and whether the purchaser obtains ownership rights or only a limited licence.

Where a digital asset constitutes a security, Section 17(b) of the Securities Act of 1933 prohibits promotion of the asset for compensation without disclosing the receipt, nature and amount of that compensation. The SEC has applied this provision to compensated crypto-asset promotions, including by influencers. In March 2026, the SEC issued an interpretation, accompanied by CFTC guidance, establishing a taxonomy for digital commodities, collectibles, tools, stablecoins and securities. The interpretation provides that most crypto-assets are not themselves securities, but a non-security asset may still be offered and sold as part of an investment contract under the Howey test, meaning that an issuer’s marketing and public statements, including representations about anticipated managerial efforts and returns, may affect the asset’s treatment under federal securities laws. The SEC has also proposed a “Regulation Crypto Assets”, which would establish tailored offering and disclosure requirements for crypto-assets offered under an investment contract, along with a safe harbour for exiting that status.

Congress has also begun establishing a statutory framework for digital assets. The GENIUS Act, enacted in July 2025, creates a federal licensing and supervisory regime for payment stablecoins and prohibits issuers from claiming that stablecoins are backed by the US government, federally insured, or legal tender; implementing regulations are pending, and the statute is expected to take effect in January 2027. The CLARITY Act, which would further allocate jurisdiction between the SEC and CFTC and establish registration pathways for digital asset intermediaries, passed the House in July 2025 and advanced from the Senate Banking Committee in May 2026. Together with the SEC’s increased reliance on interpretations and rulemaking, these developments are producing a more defined regulatory framework for advertising, marketing and selling digital assets in the United States.

There are currently no metaverse-specific advertising statutes or regulations in the US; regulators generally apply existing advertising, privacy, endorsement and consumer protection laws to metaverse activities. The FTC has indicated that traditional truth-in-advertising principles, disclosure requirements and prohibitions on deceptive practices apply regardless of medium. Current areas of focus include native advertising, virtual influencers, dark patterns, privacy and advertising directed to children. Recent guidance and commentary from the FTC, NAD and CARU emphasise that consumers must be able to recognise advertising and understand material information even in immersive virtual environments.

Ads for food, dietary supplements, drugs, medical devices, alcohol, tobacco/vaping products and cannabis are subject to additional regulations beyond general advertising law. Depending on the product category, advertisers may need FDA approval, to comply with FDA labelling and advertising rules, and to possess competent and reliable scientific evidence for health claims. In addition, advertisers may need to comply with the Alcohol and Tobacco Tax and Trade Bureau regulations for alcohol and tobacco products and state-specific restrictions for products such as cannabis.

In FAQs related to the Endorsement Guides, the FTC expressed the opinion that, “under the FTC Act, product placement (that is, merely showing products or brands in third-party entertainment content, as distinguished from sponsored content or disguised commercials) doesn’t require a disclosure that the advertiser paid for the placement”. Sponsored content or disguised commercials will be examined under the FTC’s guidelines for native advertising.

The FCC’s sponsorship identification rules, however, require a disclosure when consideration is provided for the inclusion of products, brands or other material in broadcast programming. These rules apply to broadcast television, radio and, in some contexts, cable programming.

This chapter provides a broad overview of advertising laws that apply to most products and services.