Apparently We Need the FTC to Regulate Blogs Now

Posted by Enrique on 10.08.2009

They’re here to help...



In our latest edition of "Your Government at Work," the Federal Trade Commission has revised its "Guides Concerning the Use of Endorsements and Testimonials in Advertising" for the first time in nearly 30 years. And to think, we hapless consumers went all that time without the government issuing new officious regulations dictating how advertisers can inform us about the products/services they sell. It's amazing we haven't devolved back into chimpanzees.

An interesting facet of the new guidelines is they represent the first attempt at government interference with blog content. In a misguided attempt to be helpful, the FTC is requiring bloggers to disclose any material relationships they might have with the sellers of products discussed on the blog, on penalty of fines up to $11,000. While the guidelines might seem inoffensive to people who don't think very deeply, they raise the question – why do we need the FTC to regulate advertising at all?

The story so far…

The new FTC regulations, which will go into effect on December 1, can be viewed here. I don't recommend reading the whole thing unless you hate yourself, but for the guidelines that may affect bloggers, skip to page 75 – "Disclosure of material connections" – and skim to the end. The operative regulation is: "When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed." Well, that sounds sensible – but all government attempts to regulate speech sound sensible. They wouldn't be able to get away with it otherwise. The FTC goes on to list some examples of impermissible endorsements:

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or "blog" where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review.

Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

As you may be aware (although the FTC assumes you're not), companies generally offer freebies to media reviewers. Film critics, for example, typically receive free tickets for advance screenings of movies. They might also receive other promotional detritus like coffee mugs, tote bags, and key rings.


Pewter, motherfucker

I'm sure that revelation rocks your world, dear reader. Here's another tidbit – some of the albums reviewed at 411 Music were provided free of charge. Try not to shit your pants. As for the video game blogger in the FTC example, are we really supposed to believe the knowledge he received a comp console will substantially affect his readers' judgment? As a video game consumer myself, I can assure you gamers are likely to read more than one review before they purchase a console. Consumers tend to inform themselves and shop around when it comes to the products/services they buy. While I'm sure the nice people at the FTC have the best of intentions, government regulations are notoriously prone to producing unintended consequences. Buzz Machine blogger Jeff Jarvis comments on the potential for overreach:

[T]he FTC assumes – as media people do – that the internet is a medium. It's not. It's a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don't think they are doing anything remotely connected to journalism. I imagine that virtually no one on Facebook thinks they're making media. They're connecting. They're talking. […]

And what about automated ads, such as those from Google? I have been writing nice things about my treatment at Sloan Kettering. This has caused ads to come up on my blog, via Google, from the hospital. Presuming someone clicked on them, I've made money from the hospital. Does that taint what I say or me if I don't disclose the payment? That's the level of absurdity this can reach.

The trouble with government regulations is they are usually written in such expansive language they are open to wide interpretation. And wide interpretations can translate to abuses of power. I recently wrote about the sordid case of Lori Drew, who was charged with a crime for violating the terms of service of a private web site. When the government tries to curtail civil liberties, they're not going to target popular individuals/groups; they're going to target those who won't be defended – cigarette smokers, prison inmates, religious minorities, people who drive teenagers to suicide, and shady marketers.

Although the FTC includes bloggers in their new guidelines, its main targets are advertisers in traditional media, specifically commercials that feature endorsements or testimonials from purported consumers, celebrities, or experts. For example, one regulation on pages 64-65 reads, "An advertisement containing an endorsement relating the experience of one or more consumers on a central or key attribute of the product or service also will likely be interpreted as representing that the endorser's experience is representative of what consumers will generally achieve with the advertised product or service in actual, albeit variable, conditions of use. Therefore, an advertiser should possess and rely upon adequate substantiation for this representation." That's all well and good, but does "adequate substantiation" apply to everyone equally, or do politically-connected companies face a different level of scrutiny? It's open to interpretation.

More to the point, why do we need these rules at all? The assumption seems to be that there exists this massive swath of mouth-breathing American consumers who are about to spend the last of their Social Security checks on deceptively-marketed denture cream, and THESE PEOPLE NEED TO BE PROTECTED. Protected from what exactly? Protected from making a purchase they regret? Who hasn't done that? We've all tried buying a different brand of peanut butter (or whatever) for a change of pace – or maybe because we saw an ad featuring consumer endorsements – and then realized we didn't like it. For those of us who have had that experience, we dealt with it by not purchasing that brand of peanut butter again. We moved on with our lives and chalked it up to the cost of doing business.

Keep in mind, we're not talking about the kind of expensive purchases that could cause someone real financial harm. The more costly the product/service, the more research a consumer does. No one's going out and buying a Toyota pneumatic tire forklift because they saw a celebrity talk about it on Oprah without revealing a material connection to the seller. These guidelines can only realistically apply to relatively minor purchases.

Granted, it certainly would be deceptive and maybe even immoral if Betty Crocker (for example) were to create a food blog that appeared to be written by an unbiased member of the general public who always happens to rave about Betty Crocker recipes and cookware. But even if something like that happens, so what? Ultimately, if a consumer buys something and likes it, they will keep buying it. If they don't like it, they won't buy it again, and they'll tell their friend they didn't like it. And if a company is revealed to use explicitly disingenuous advertising practices, they'll pay the price in the marketplace – consumers will be less likely to patronize them, and competitors will call attention to their dishonesty. There's simply no compelling case for government involvement, even in instances where advertisers are outright lying.

Advertising speech should be free speech. The FTC may be trying to do a good thing, but we should be highly skeptical of any government attempts to limit expression, even (especially?) in the commercial arena. Since these guidelines won't really help consumers, their only affect will have been to give nannystate bureaucrats an excuse to throw their weight around. That seems to be a recurring theme with the feds, no?