Tuesday, October 6, 2009

Stop me, FTC, before I shill again

The most scathing book review I ever wrote was of a copy of a provocative historical work sent to me by the publisher's publicist -- that is, a review copy of the sort that has been provided to writers since the printing press was young. I tore into that book for its illogic and misuse of sources. I still have that book, kept around as a door stop and to boost my son at the dinner table. I'll bet that publicist would be surprised to know that, these days, the Federal Trade Commission might subject me to an $11,000 fine -- not for savaging her pet historian, but for failing to reveal that she'd given "payment" for my review with a free book.

In search of tasks to justify its unfortunate existence, the FTC claims the authority to regulate "endorsements" of products and services. It has just issued revised guidelines (PDF) regulating who must disclose what when they say kind words about anything for which they might be considered to have received compensation, no matter how small. Affected people include celebrities, experts, "regular folks" giving testimony in advertisements ... and bloggers.

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.

The whole set of guidelines is problematic for a host of reasons. Rather than dig broadly into the mess, I'll focus on the application of the endorsement rules to bloggers/new media, since that's a topic near and dear to my heart.

And bloggers are the specific target -- ink-stained scribblers and traditional broadcasters need not fret, for specious reasons that all seem to boil down to the number of First Amendment-savvy lawyers The New York Times and CBS have on staff.

The FTC even provides its own scenarios as to when endorsement rules would apply, and the one they offer for bloggers is illuminating.

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. The manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.

A "college student" who just happens to write online about his hobby is subject to federal regulation? Really?

The rules suggest that the company soliciting the review "should advise" the college student, but there's nothing obvious in the rules to insulate the poor, dorm-living nerd from liability should he fail to mention that he got to keep the freebie.

Book reviewers are affected too, prompting MediaBistro to ask, "if it turns out that (some) publishers really do expect endorsements, bloggers might want to ask themselves: If this book is intended as compensation, is it enough compensation?" (Occasional reviewers who find themselves buried under a blizzard of review copies can answer that question easily.)

And in this increasingly DIY era, it's a mystery as to whether legally unsophisticated garage-based musicians or after-school-blogging music fans will have to fork over any fines the FTC may levy for kind words about a new single or album.

But does there even have to be a freebie to constitute "material connections" between reviewers and companies? After all, advertising involves money, and even small blogs can run ads either directly or through services like Google Ads.

And here's another complication: Who is subject to these rules? Oh sure, the FTC says its rules apply to bloggers and that "theCommission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages," but just what is a blogger? The FTC adds that "Internet news website with independent editorial responsibility" might also get a pass, but the dividing line is vague, and much of the evolving media is more dynamic and seat-of-the-pants than the FTC wants to pretend. Are the writers at Gawker bloggers? MediaBistro? How about at The Examiner, which employs editors but has much less editorial infrastructure than does, say, The New York Times?

Clearly, though. anybody writing for fun, on their own time, is subject to the new regulations. As media becomes democratized and grassroots in a way never seen before, we've finally reached the point where intrusive media regulations really are reaching into our bedrooms and threatening amateur enthusiasts. These are the people least likely to be willing or able navigate their way through federal regulations regarding what they can say and how it must be said.

The result is either going to be mass defiance of the rules, rendering them irrelevant, or else stepped up and necessarily arbitrary enforcement, resulting in a chilling effect on grassroots media.

Either way, the best way to address the whole issue is to dump the rules -- and the presumptuous, intrusive FTC along with them. Let people figure out for themselves who is and isn't credible, and keep the regulators at a healthy distance from our conversations with one another, whether online or off-line.

Oh, and by the way, I plan to keep reviewing stuff including books, good or bad, and I'll likely keep some of it around -- for reference, or for ballast.

Consider that my disclosure.



Blogger Divemedic said...

Obama DID say he would bail out big media. This rule will be used to stifle bloggers, who are taking business away from traditional media, and I am sure that it will eventually be used to eliminate those who speak out against the administration.

October 7, 2009 4:21 AM  
Blogger BobG said...

I think I have to agree with Divemedic; this is more about stifling independents than protecting anyone.

October 8, 2009 7:25 AM  
Blogger Chris said...

Can you spell "C-H-I-L-L"?
Abolish the F-T-C!

October 9, 2009 8:16 AM  

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