Bloggers Bristle At New Blog Regulation

The Federal Trade Commission updates its rules to tackle paid-endorsements by Internet users, much to their chagrin

In an effort to corral Web malefactors, the Federal Trade Commission released a new set of rules on Monday mandating that bloggers and social-network users disclose paid product-endorsements starting Dec 1, 2009. According to the revised advertising guidelines (the first such revisions in nearly 30 years), celebrities are also responsible for revealing "material connections" to product sellers. Finally, the rules clarify that anyone endorsing a product or service "may be liable for false or unsubstantiated claims made in an endorsement," to the tune of an $11,000 fine per infraction.

Not surprisingly, most bloggers aren't thrilled about the prospect of a new sheriff coming to town, but some understand the need for regulation, while doubting that enforcement will be easy.

• No Need Several bloggers agree that there should be standards for disclosing "payola" but felt that they should be left up to the private sector to enforce rather than the government. "I'm all for disclosure, but why should government busy itself with it?" inquires BusinessWeek's Stephen Baker, "Seems to me that lots of bloggers already go to great lengths to make disclosures. In time, won't the public start doubting those who don't--and won't their reputations fall? Am I naive to think that peer pressure would work?"

• Too Vague Wired's Ryan Singel thinks the new rules raise far too many questions to be considered workable at present: "For instance, is it enough to disclose on an 'About Me' page that one accepts samples or does each review need to have that disclosure? What's the short code for disclosing that information in 140 character tweet? What responsibility do review aggregation sites, such as those run by Google or Microsoft, have if they display posts are 'sponsored'?" Tech Dirt's Michael Masnick is similarly baffled: "It seems to me like this could just create a totally unnecessary minefield for anyone who blogs. And why is this focused on bloggers and word-of-mouth marketers?"

• Totalitarian Making the slippery slope argument, Destructoid's Jim Sterling claims that the FTC will exploit the lack of definitive digital terminology to their advantage: "It doesn't define who exactly is accountable. Is it just 'blogs' or would IGN have to disclose stuff? Is Destructoid included? It seems to just include 'hobby' blogs, but it's entirely for the FTC to decide what constitutes hobbyism and professionalism. For a report that demands disclosure, it's not exactly forthright itself." At Buzz Machine, Jeff Jarvis is critical of the new rules, which he believes are based on the FTC's grave misconceptions about the Internet. He laments:
  

"The 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. So for the FTC to go after bloggers and social media - as they explicitly do - is the same as sending a government goon into Denny's to listen to the conversations in the corner booth and demand that you disclose that your Uncle Vinnie owns the pizzeria whose product you just endorsed."

• Digital Double Standard Several bloggers are taking issue with the fact the new rules do not apply to "traditional media," or even the websites of traditional, established news and review organizations. "Every news organization covering technology gets freebies by the container-load. Book reviewers' offices overflow with volumes sent by publishers. Subsidized or even complimentary travel, food and other things of this sort are common but too-rarely disclosed," complains Dan Gilmor on Mediactive. The Business Insider's Jay Yarow goes off on a similarly damning tangent: "Never mind that TV, radio, and print publications have never had any such disclosure requirement (and still won't)...Never mind that consumers aren't three-year old morons. Never mind that there are plenty of other reasons people are biased other than having been paid. The government must protect you (and mainstream media) from those dangerous bloggers!" Reason's Tim Cavanaugh is incensed enough to call for the abolition of the FTC: "Thank Satan we do not subject newspapers to this asinine level of scrutiny and disclosure. Praise Cybele that Sen. Obama did not have to include statistics provided by Dick Morris during his campaign commercials. Why does the Federal Trade Commission exist?"

• Kiss Shaq and Ashton's Twitter-Feeds Goodbye CNet's Caroline McCarthy highlights the fact that the new rules could potentially have the greatest impact on previously oblivious celebrities, who now have to disclose payola "outside the context of traditional ads, such as on talk shows or in social media" As she explains: "That means, theoretically, that if a celebrity gushes about a new car on his or her Twitter account and it turns out that the car was given away for free, the celebrity could be fined by the FTC." Likewise, Peter Feld cautions them to be especially mindful at Brandchannel: "A safe prediction for 2010: some big scandal when the first celebrity to run afoul of the new rules, by promoting a product on Twitter or a talk show, gets fined by the FTC"

• Accept and Adjust Bucking the popular trend, a few bloggers at PC World are more tolerant of the new rules. David Coursey offers his support: "This is a good rule that won't stop the unscrupulous but will help well-meaning (if crass) bloggers do the right thing by their readers. In my case, I will be more diligent about reporting when I am writing about software I've gotten as a free review copy, although I don't think the practice comes as a surprise to readers." Ian Paul draws up "a quick guide" of new online habits that readers should get used to if they want to be in compliance with the FTC's changes. They range from the obvious--"If you receive gifts, money or any other type of compensation from a product manufacturer or service provider you have to disclose it,"--to completely surprising--"Don't post comments that undercut your company's competitors unless you make it clear who you are. This one is especially important to follow, since the FTC has dealt with this before."