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The FTC and the Unreasonable Case of Disclosure

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The blogosphere is starting to think about the new FTC regulations we mentioned yesterday. Case in point, Nine reasons why the rules will solve no problem, and just cause headaches:

I'm With Stupid

However, I don’t believe that the new FTC guidelines actually help to further the goals of transparency but rather, instead, the new rules will be rife with abuse and misuse and uneven application. Here’s why:

1. Adversely affects smaller blogs. Small blogs like ours do not have editors. We don’t get paid to review and what we do is truly a labor of love. Yes, we are starting to host ads but we cannot afford a full time editor for our reviews. Blogs without editorial staffs will be subject to the new rules while blogs and mainstream publications, regardless of other issues and relationships, will not. Let me state it this way: the blogs with the highest earning capacity will likely be exempt while the blogs with the lowest earning capacity will not. I found it fascinating that Richard Cleland of the Bureau of Consumer Protection said this:

Cleland said that a disclosure was necessary when it came to an individual blogger, particularly one who is laboring for free. A paid reviewer was in the clear because money was transferred from an institution to the reviewer, and the reviewer was obligated to dispense with the product. I wondered if Cleland was aware of how many paid reviewers held onto their swag.

“I expect that when I read my local newspaper, I may expect that the reviewer got paid,” said Cleland. “His job is to be paid to do reviews. Your economic model is the advertising on the side.”

From Cleland’s standpoint, because the reviewer is an individual, the product becomes “compensation.”

[Click to continue reading The FTC and the Unreasonable Case of Disclosure | Dear Author: Romance Novel Reviews, Industry News, and Commentary]

and Number 7, especially as it pertains to Twitter is a bit of a joke:

Eliminating any relationships. § 255.5 requires disclosure of “material connections”.

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

I’m not sure what this pertains to. I have attended luncheons, parties with publishers. Do I need to explain each and every piece of swag I am ever given? Could I even possibly remember every pen and mint tin I picked up? I doubt it.

It’s important to note that in various interviews around the web and in the Guide itself, the FTC contemplates that any comment, tweet, post on a facebook page, participation on a message board, must be accompanied by the relevant disclosure.

As for Twitter, the FTC isn’t letting you get a pass with the excuse that 140 characters–Twitter’s famous text limit–is simply too short. “There are ways to abbreviate a disclosure that fit within 140 characters,” Cleland said. “You may have to say a little bit of something else, but if you can’t make the disclosure, you can’t make the ad.”

I do wonder how long it will take before this policy is attempted to be enforced, and how long before a high-profile case goes before the courts. Do I have to hire an editor now? An advertising manager so there is a wall between “content” and “advertising”? How come celebrity magazines1 are seemingly exempt from the FTC? If I read another positive review about a Michael Bay film, I may ask the FTC to investigate.

Footnotes:
  1. print and television []

Written by Seth Anderson

October 6th, 2009 at 8:38 am

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  1. […] new FTC’s rules do raise many questions (e.g.: how do you disclose when you only have 140 characters?, how exactly do you word the disclosure policy? etc), leaving plenty of food for thought. While […]

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