Next On The FTC Agenda: Fines For Hotlinking And Failure To Hat Tip

Oct 5, 2009

By Patrick.

The Federal Trade Commission today approved rules for blogging endorsements.

The FTC said Monday its commissioners voted 4-0 to approve [its] final Web guidelines, which had been expected. Violating the rules, which take effect Dec. 1, could bring fines up to $11,000 per violation. Bloggers or advertisers also could face injunctions and be ordered to reimburse consumers for financial losses stemming from inappropriate product reviews.

The commission stopped short of specifying how bloggers must disclose conflicts of interest. Rich Cleland, assistant director of the FTC’s advertising practices division, said the disclosure must be “clear and conspicuous,” no matter what form it will take.

The upshot is that if a blogger receives a free product, the blogger must disclose that fact if he or she endorses or otherwise writes about the product. While disclosure of freebies is good ethics for bloggers generally, I predict that the end result is going to be a muddled morass in which nobody, including the FTC itself, understands the rules, but the government moves further toward regulation of blogs.

Yes, I believe in the slippery slope.

“Your honor, the courts have for years upheld the government’s authority to regulate commercial speech on weblogs, including mandates for prominent disclosure of conflicts of interest. If we require bloggers to reveal that they receive free products from Coke or Pepsi, it only makes sense that we require Blogger X to disclose that he is employed by Party Y, or that he receives tips from Campaign Z. After all, if the government has a compelling interest to require bloggers to disclose commercial conflicts of interest, how much more important is the government’s interest in guaranteeing free and fair elections, on the web as elsewhere?”

The FTC’s proposal made many bloggers anxious. They said the scrutiny would make them nervous about posting even innocent comments.

To placate such fears, Cleland said the FTC will more likely go after an advertiser instead of a blogger for violations. The exception would be a blogger who runs a “substantial” operation that violates FTC rules and already received a warning, he said.

Define “substantial,” in plain English, please. And also, define how the guidelines will punish those who file frivolous FTC complaints against a blogger for reasons that have nothing to do with advertising. “Hey, this guy sure does criticize the government a lot. I wonder whether he’s getting free stuff from Amazon?”

Of course the final guidelines, I’m sure, will be a model of clarity, easy to understand for consumers, advertisers, and bloggers alike. No one will need a law degree to blog.

You can determine that for yourself, just by reading the Commission’s EZ-2-Read 81 page Notice of intent to regulate.

Hat tip: Fritinancy, through Twitter.

Update: Ron Coleman called this over two years ago.

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13 Comments

Free Speech, Nanny State

11 Comments

Ken • Oct 5, 2009 @1:15 pm

This makes me very angry and agitated. I need something to soothe and cool me down — a refreshing, clean Zima, perhaps. Zima — the blogger’s drink.
Linus • Oct 5, 2009 @1:46 pm

I have heard (and argued with) numerous otherwise-intelligent people who “poo-poo” the slippery slope, or argue that only moonbats and paranoids believe in it. I assert that any lawyer who doesn’t believe in it was asleep all through law school and is asleep today. ALL of your legal arguments are based on precedent (for prior situations exactly like yours) and analogy (for every other situation) or some mix of the two. How is it crazy to think an argument will be made exactly like the one Patrick wrote above? It’s a lawyer’s JOB to extend the umbrella of the law to cover his client (in good faith, of course).

To placate such fears, Cleland said the FTC will more likely go after an advertiser instead of a blogger for violations

Your Honor, the FTC has been going after advertisers for violations for years. There’s no reason not to punish the other party to the transaction as well.

I cannot believe that anyone, anywhere, still buys the argument “I promise, I will only use my powers for good.”

I prefer Mexican Coke to the American-made version.
Bob • Oct 5, 2009 @1:52 pm

Who cares what you think? You’re not a substantial blog until the FTC comes after you.
Patrick • Oct 5, 2009 @1:57 pm

I wonder whether, when the New York Times editorializes in favor of these regulations, as it will, the Times will disclose that its advertising revenues are plummeting in part because many people prefer to read opinions, and even news, from bloggers.
shg • Oct 5, 2009 @4:17 pm

The 1961 Ferrari California 250 GT Spyder is a spectacular car that I highly recommend. Now, as soon as someone sends me a free one, I will happily pay my $11,000 fine. Any takers?
Windypundit • Oct 5, 2009 @4:59 pm

I doubt they’d take on someone like Glenn Reynolds. He’s far too mainstream. I think they’ll use this as an excuse to attack what they’ve always attacked: Things that are, by some politicaly useful definition, sinful. If these guidelines go into effect, it won’t be very long before they hit sites that review pornography, tobacco, alcohol, and guns.
MisterDNA • Oct 5, 2009 @9:10 pm

To placate such fears, Cleland said the FTC will more likely go after an advertiser instead of a blogger for violations

That’s a red flag right there.

If they don’t plan on going after bloggers, they need to make that clear in the law.

This has happened with all sorts of bad laws: Lawmaker says, “This law is intended to go after the most egregious violators, not the rank-and-file man on the street”, yet when Mr. Rank-and-File Man On The Street gets arrested under the new law, the lawmaker says, “Well, he broke the law and we have to send a message.” (cf. the grandmother in Indiana arrested last week for buying OTC cold remedies.)

Of course, the FTC would surely never go after a lowly blogger just for stating a cold, hard fact: a vintage Gretsch guitar is a wise investment; if you don’t already own one, get yours today!
Kevin • Oct 5, 2009 @9:42 pm

Once we head down the Party Y / Campaign Z slippery slope you’ve mentioned, will we see reporters disclosing who their spouses are employed by? Who their college roommates are married to? Who their mistresses work for?

Because every time I do find out something about the careers of Senators’ spouses and senior administration officials 20-year racquetball partners, it’s usually pretty interesting. And appalling.
mojo • Oct 6, 2009 @8:11 am

Sure would be interesting if the FTC’s internal decision-making docs somehow got wide release on the web, wouldn’t it?

Of course, that could never happen. The Government controls the internet.

(snicker)
Chris • Oct 6, 2009 @3:02 pm

They stopped making Zima, FYI. Probably because of the FTC.
Legally UnBound • Oct 7, 2009 @9:55 am

I always feel secure when assured that the gov’t will “more likely” do or not do anything.

*I was not compensated by anyone to state such opinions. These opinions are simply opinions and are in no was meant to disparage or otherwise detract from the great reputation that the US Gov’t has built behind its ‘brand’.