October 22 – October 29, 2009 Edition

FTC Blogger Rules Muzzle Free Speech?

WASHINGTON, DC/AUTHORLINK NEWS/10/22/09–A number of bloggers are outraged by the Federal Trade Commission’s new “Guidelines Concerning the Use of Endorsements and Testimonials in Advertising” which now extend to people commenting on products or services on the Internet, including bloggers.

The Federal Trade Commission will require bloggers to clearly disclose any freebies or payments they get from companies for reviewing their products. The FTC commissioners earlier this month voted, 4-0, to approve the final guidelines. Penalties include up to $11,000 in fines per violation, effective December 1. It is the first time since 1980 that the commission has revised its guidelines on endorsements and testimonials, and the first time the rules have covered bloggers. The commission has not yet specified how bloggers must disclose any conflicts of interest.

Online advertisers have joined the growing backlash from bloggers, citing the new rules as an impingement upon free speech.

The Wall Street Journal’s blog, Digit , reported that The Interactive Advertising Bureau President Randall Rothenberg suggested the FTC rescind the new guidelines.

“These revisions are punitive to the online world and unfairly distinguish between the same speech, based on the medium in which it is delivered,” he wrote in an open letter to the FTC last Thursday. The online-advertising trade group suggested the FTC try a do-over, after opening up the issue for discussion with bloggers and online advertisers.

According to IAB, the rules unfairly and unconstitutionally impose penalties on online media for practices in which offline media have engaged for decades.

According to the Citizen Media Law Project, the new rules raise First Amendment concerns. On October 8th, 2009 Eric P. Robinson wrote o that site:

“Even if the blog postings in these situations can be considered commercial speech — an arguable point — which can be subject to more regulation than other forms of speech, see Va. State Bd. of

Pharmacy v. Va. Consumer Council, 425 U.S. 748 (1976), such regulations must directly advance a substantial government interest and may not be more extensive than necessary to serve that interest. See Central Hudson Gas & Electric Corp. v. Public Svc. Comm’n, 447 US 557 (1980). Even if the government interests here are substantial, can the new rules directly advance these interests when they rest on suspect assumptions and faulty generalizations about speech online? Moreover, 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. Both Dan Gillmor

and Jeff Jarvis convincingly argue that the new FTC guidelines misunderstand the conversational character of online speech. It may prove very difficult to determine which of these conversations are noncommercial expressive speech and which are simply buzz marketing.”

FTC officials say they’re not trying to hound bloggers or Twitterers and aren’t planning on going after individuals, just the advertisers who might try to tempt them with freebies or cash.

“We will be focusing any enforcements on advertisers, not on individual endorsers,” said Mary Engle, the FTC’s associate director for advertising practices, on a call with reporters Wednesday. “We are not planning on investigating individual bloggers.”

Digit updated its report October 16, 2009, with the FTC’s response to Rothenberg’s remarks: “Although the IAB contends the FTC’s Endorsement Guides are unconstitutional, the Guides apply only to marketing and they attempt to illustrate some of the factors relevant to distinguishing advertising from editorial content. If particular communications do not in fact constitute advertising, as the IAB appears to be suggesting, then the Guides do not apply. Where the message is advertising, however, disseminators have an obligation to ensure it is not misleading. This includes, when it is not otherwise clear from the context, identifying when the endorser has been paid for the endorsement. Although IAB may disagree with the policy, nothing in this approach is unconstitutional.”

Meanwhile, a number of bloggers strongly differ.

The blog, BuzzMachine said the regulations are ” a monument to unintended consequence, hidden dangers, and dangerous assumptions.. . the FTC assumes – as media people do – that the internet is a medium. It’s not. It’s a place where people talk.”

BuzzMachine blogger Jeff Jarvis, called the new rules: “Insanity and inanity. And danger. . .The regulations raise no end of questions. For example: How much do I have disclose? Before I say anything nice about anyone, do I need to list every advertiser I’ve ever had? Every possible business relationship? You think my disclosures are comical now, just wait.”

Dana Loesch, who has a radio show and a blog, said “The government is attempting to put all website, both personal and professional, under its thumb under the guise of protecting consumers from dishonest bloggers and bloggers from dishonest companies. It shows a lack of faith in both the public and the blogging community which has been doing just fine and doesn’t welcome the bureaucracy. This is all about the Benjamins in the name of regulation. Uncle Sam saw a way to make money while controlling speech.

“Because Uncle Sam think the public is too stupid to make decisions alone or to recognize endorsements verses common reviews. So if a company sends you a dollar-store toy, you will be scrutinized by the government, regardless whether you were asked to post a review or not. The FTC was very clear in their repeated use of “case by case basis” in their report , however if someone receives cash or an in-kind payment to review a product, it’s considered an endorsement, and thus subject to the new rules.

More opposition is noted at The Free Expression Network and many other blogger sites.