I have been reading a lot lately on the FTC’s new “guidelines” for bloggers that require bloggers to disclose freebies they receive and write about. I am concerned about this newest government entrance into free speech. I lack faith that a government agency can handle these new regulations without interfering in legitimate speech. These “guidelines” can be enforced with severe financial penalties.
First, in the few months of this blog’s existence I have not a single freebie.
Spending on consumer-generated and social-networking sites exceeded $1 billion in 2008 and is growing fast, according to a New York Times Op Ed article favoring the FTC’s guidelines. While much of this advertising is clearly labeled as advertising, “a lot of it is paid advertising masquerading as bona fide endorsements,” according to the NYTimes. The Word of Mouth Marketing Association says the value will increase to $3.7 billion by 2011.
Note that in a bit of journalistic slight of hand the NYTimes failed to define what it means by, “a lot,” in reference to the amount that is masquerading as bona fide endorsements. Thus, without that information we the readers can’t really judge the size and scope of the problem that the FTC is trying to solve. The FTC Guidelines contain examples that might constitute actual cheating of consumers, or might not, but no data defining the scope of the problem.
I have no doubt that with more than $1 billion in play, there are some bloggers that endorse products without clearly stating that they are being paid. That is a shame and in my opinion, wrong. But before I can agree to the need for legislation I would need to see some proof of a substantive problem.
The size and scope of the problem seems just as vague as do the guidelines the FTC has created to solve the problem. Further, why don’t these guidelines restrict the mainstream media to the same extent that they restrict online media?
Eric P. Robinson writes at Citizen Media Law Project that, “the guidelines are complex and their application in marginal cases is uncertain.” He defines the problem further by stating that, “the difficulty in drawing the line between what does or does not constitute an “endorsement” may mean that the regulations regulate or (at the very least) chill noncommercial speech, which is entitled to full First Amendment protection.”
Jack Shafer writes in Slate, “The guidelines have to be read to be believed. They are written so broadly that if you blog about a good and service in such a way that the FTC construes as an endorsement, the commission has a predicate to investigate.” He adds that, “As I read the guidelines, the FTC could investigate you if you did disclose but it was not satisfied with the disclosure.”
If Shafer’s warnings aren’t enough to scare bloggers and people that value the First Amendment, this from FTC spokesman Richard Cleland should worry them. In an interview with blogger Edward Champion, Cleland said, “These are very complex situations that are going to have to looked at on a case-by-case basis to determine whether or not there is a sufficient nexus, a sufficient compensation between the seller and the blogger, and so what we have done is to provide some guidance in this area. And some examples in this area where there’s an endorsement.”
In other words, it is up to the FTC to decide, after the fact, what is and is not an endorsement. That leaves ample opportunity for government abuse. Further, Walter Olson at Overlawyered writes, “At some point, acceptance of such benefits will be deemed to create a relationship that must be disclosed even on other occasions, when, say, you mention an author or a nonprofit institution in a different context six months later.”
Supporters of the new guidelines should look at the Ten Principles of this blog, specifically Principle 10, on and an established political class. The FTCs guidelines are vague, or stated differently; if yours is not the party in power, the FTC’s guidelines are dangerously vague. Supporters should realize that one day these FTC guidelines could be in place under a future version of President Bush, the one that gave us the Patriot Act. What constitutes an endorsement could easily become an opinion supporting one candidate over another. Is this what you want? Compensation for the endorsement could be construed as just about anything. How about the free newsletter the candidate sent you?
Folks, if there really is a problem and consumers are being cheated then well written guidelines may be a solution. I don’t accept the examples from the FTC’s published guidelines showing that marketers are trying to influence consumers; I want to see that they are influencing them. And these guidelines are not well written.
The internet flourishes today thanks in no small way to the most minimal of government controls. Unless the FTC can provide significant evidence that further control is needed to protect people from being cheated, they need to stay out of the Internet. And for that matter, regulators need to get out of the mainstream media as well – see McCain Feingold.
In the meantime, I am going to get with the spirit of the guidelines and help out the FTC. As I pointed out in paragraph six, the New York Times is not required to disclose their financial interest in legislation and regulatory action they endorse. However, as a loyal New York Times reader, I want to make sure their online presence is safe amidst these vague FTC guidelines. Therefore, on behalf of the NYTimes I want to disclose that the NYTimes endorsed the FTC guidelines while having a substantial financial interest in their application. According to a New Study by TWI Surveys on behalf of Society for New Communications Research, 57% of senior public relations and marketing communications professionals project that in five years they will be spending more on conversational marketing than traditional marketing. That means that bloggers and social media will be taking a big bite out of the New York Times’ revenue. Of course the NYTimes supports the bill.
Good thing I disclosed it on the NYTimes behalf. No need for the NYTimes to thank me because I get to read their newspaper online for free. I wonder if the FTC requires me to disclose that!
{ 2 comments… read them below or add one }
I agree whole-heartedly with you on this, Robert. The vagueness you pointed out is scary, to say the very least. If there’s a problem, then document the impact it has had, it is having, and it will likely have, and then let’s do some good ole’ root cause analysis, ferret out the real problem and then let’s get it fixed and fixed right. Once. And, for all.
Oh, and thanks for your full disclosure. I bet the FTC folks are disappointed that you left nothing unsavory to uncover. To reflect your behavior, I am disclaiming any receipt of a product or service in return for reading the blog. (Hey, will the FTC guidelines extend to comments)? And I didn’t accept any remuneration for submitting this comment, either.
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