Tuesday, October 6, 2009

Federal Trade Commission Publishes Guide Governing Endorsements; Effects Bloggers And Social Media

Federal Trade Commission (FTC) has published a new guide governing endorsements. This effects bloggers, celebrities, and could effect social media. Basically, the new rule requires you to disclose "material connections" be it free samples or payment of any kind, when you endorse a product. This will not effect me because I find such practices distasteful. Still, the rule is not very clear, especially as to who falls under these new guidelines. Since the Berman Post is an open site, it probobly qualifies. What if instead we were dealing with a privet blog with a readership less then 100; 50; 25...? How about a Twitter account with less then a dozen followers or the Facebook account of a person who is only friends with their immediately family? The lack of clarity may mean that it is overbroad. Add to that the likely selective enforcement, and may get tossed by a court should a case be brought.

http://www.ftc.gov/opa/2009/10/endortest.shtm

"The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.
...
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.
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Althouse links to http://www.buzzmachine.com/2009/10/05/ftc-regulates-our-speech and opines "The most absurd part of it is the way the FTC is trying to make it okay by assuring us that they will be selective in deciding which writers on the internet to pursue. That is, they've deliberately made a grotesquely overbroad rule, enough to sweep so many of us into technical violations, but we're supposed to feel soothed by the knowledge that government agents will decide who among us gets fined. No, no, no. Overbreath itself is a problem. And so is selective enforcement." (http://althouse.blogspot.com/2009/10/ftc-going-after-bloggers-and-social.html). Via Glenn Reynolds who agrees with a simple "Indeed" (http://pajamasmedia.com/instapundit/86301).

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