FTC takes aim at sock puppets with Death Star

The Intertubes were buzzing today after the Federal Trade Commission (FTC) released new guidelines concerning "endorsements and testimonials" which have been broadened to include social media — you're soaking in it — and which cast such a wide net for undisclosed bias that many legitimate bloggers might find themselves facing enforcement action.

While there are many laudable aspects to the guidelines — the refined requirements for disclosing non-typicality in advertising, in my opinion, are LONG overdue — the tests articulated for "compensated" blogging are pretty blunt instruments:

Thus, a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement. In contrast, postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.

Although other situations between these two ends of the spectrum will depend on the specific facts present, the Commission believes that certain fact patterns are sufficiently clear cut to be addressed here. For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests. If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be “endorsements,” as are postings by participants in network marketing programs.
FTC guidelines, p. 9

Look, I have no problem with requiring astroturf product campaigns to disclose their funding sources. But the FTC goes on to affirmatively assert that citizen journalists do not inherently have the same safe harbors as traditional media.

The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media. In general, under usual circumstances, the Commission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages. Accordingly, such reviews are not “endorsements” within the meaning of the Guides.
FTC guidelines, p. 47

Taken together with this week's rumblings in Congress to limit Federal shield law protection for bloggers, this is a disturbing trend by the government to decide what constitutes freedom of the press.

Some reasoned analysis from Dan Gilmore and Jeff Jarvis, a rather pointed query ("Are we all going to have to wait until the people in government die off and are replaced by younger people who grew up with the new media before we get anything resembling clued-in legislation?") from Eric Rosenfield, and a be-awesome interview with an FTC official by Edward Champion that you should really read.

The full guidelines are available on the FTC Web site. I would tell you to Google for more information, but since Google provides their search services to me free of charge...

Full disclosure: I disclose fully whenever relevant in postings. And to get the jump on December 1 when the rules take effect, I have added a disclosure section on my About page.

Comments

On the definition of "covered person" in the Federal shield law you mention, the definition reads as follows:

"The term "covered person" means a person who regularly gathers, prepares, collects, photographs, records, writes, edits, reports, or publishes news or information that concerns local, national, or international events or other matters of public interest for dissemination to the public for a substantial portion of the person's livelihood or for substantial financial gain and includes a supervisor, employer, parent, subsidiary, or affiliate of such covered person."

Well, I think it is important to note that this definition would exclude Thomas Paine, the man frequently called the Father of the American Revolution. Paine did not publish Common Sense under any "supervisor, employer, parent, subsidiary, or affiliate." It was his own independent work, and for most of his life up to that time Paine was not even in the publishing business. He variously earned his living as a corset maker, a civil servant, a minister and a teacher.

According to the definition of a "covered person" in the proposed Federal law, Thomas Paine would get no protection as a citizen journalist, and let's remember that Paine was advocating independence from the English King, a crime of treason punishable by death.

Hi, Maddie...
As long as Thomas Paine wasn't talking about rich, delicious King® Syrup (Yum! I had some on my pancakes this morning) he would have nothing to fear. Outrageous affronts to common sense will not raise an eyebrow, but mention a product and he'll be standing tall before the FTC faster than you can say, "Give me liberty, or give me waffles slathered with King® syrup."

Cheers.
-j

Full disclosure: I am full of smooth, golden King® syrup.