Social Media Advertising Regulatory Frameworks & Compliance 2 — Questions and Answers
Question 1: Under the FTC's endorsement guidelines, which scenario requires a disclosure even without direct payment?
- An influencer who received free products to review (Correct answer)
- A customer who voluntarily posted a positive review
- A journalist covering a product launch for a news outlet
- A user who organically tagged a brand in a personal photo
Correct answer: An influencer who received free products to review
The FTC requires disclosure whenever there is a material connection, including receiving free products, regardless of whether cash was exchanged.
Question 2: Which U.S. law specifically regulates email marketing and sets requirements like opt-out mechanisms and accurate subject lines?
- GDPR
- CAN-SPAM Act (Correct answer)
- CCPA
- COPPA
Correct answer: CAN-SPAM Act
The CAN-SPAM Act of 2003 governs commercial email in the U.S., requiring honest headers, opt-out options, and identification as advertising.
Question 3: A social media ad targets users aged 12–15 and collects their email addresses without parental consent. Which law is most directly violated?
- CAN-SPAM Act
- FTC Act Section 5
- COPPA (Correct answer)
- TCPA
Correct answer: COPPA
COPPA (Children's Online Privacy Protection Act) prohibits collecting personal information from children under 13 without verifiable parental consent.
Question 4: What does 'legitimate interest' mean under GDPR as a lawful basis for processing personal data in ad targeting?
- The advertiser has paid for access to the data
- Processing is necessary for the advertiser's genuine business purpose without overriding user rights (Correct answer)
- The user has explicitly opted into all advertising
- The data was sourced from a licensed third-party broker
Correct answer: Processing is necessary for the advertiser's genuine business purpose without overriding user rights
Legitimate interest allows data processing when it is necessary for a genuine business purpose that does not outweigh the individual's privacy rights.
Question 5: An advertiser uses a dark pattern to make opting out of data collection extremely difficult on a California-based site. Which regulation is most likely violated?
- FTC Act
- CCPA/CPRA (Correct answer)
- CAN-SPAM Act
- COPPA
Correct answer: CCPA/CPRA
CCPA/CPRA explicitly prohibits the use of dark patterns that make it harder for California residents to exercise their privacy rights.
Question 6: Which platform-specific policy requires that ads for housing, employment, or credit cannot use certain demographic targeting options to prevent discrimination?
- Twitter/X Brand Safety Policy
- Meta's Special Ad Categories (Correct answer)
- TikTok Creator Marketplace Rules
- LinkedIn's Professional Community Policy
Correct answer: Meta's Special Ad Categories
Meta's Special Ad Categories restrict targeting options for housing, employment, and credit ads to help prevent discriminatory advertising practices.
Question 7: What is the primary purpose of an advertising disclosure being 'clear and conspicuous' under FTC guidelines?
- To ensure the disclosure is visible before purchase only
- To place it anywhere in the post as long as it exists
- To make it noticeable and understandable to the average consumer (Correct answer)
- To match the brand's style guide and visual identity
Correct answer: To make it noticeable and understandable to the average consumer
The FTC requires disclosures to be clear and conspicuous so that consumers can easily notice and understand the material connection.
Social Media Advertising Regulatory Frameworks & Compliance 2
Under the FTC's endorsement guidelines, which scenario requires a disclosure even without direct payment?