Yesterday, 6 October 2009, the US Federal Trade Commission (FTC) published its updated and final guidelines for governing endorsements and testimonials, with several changes to the outdated 1980s version. This update has been discussed in various posts on a number of popular blogs for several months but most commentary seemed to play down the width of the guidelines and whether they even made sense. While this guidance will not likely yet effect everyone, the move will probably guide other countries to reconsider their outdated media laws in order to keep pace with the US.
It needs to be examined; can the FTC pass laws that effect the entire internet? There is the concept of net neutrality and this sweeping guidance cannot be a good path to follow for any government department. US media outlets are already screaming murder as these rules potentially violate bloggers free speech rights under the First Amendment.
The bigger issue not yet discussed is the location and hosting of many popular social media services and blogs: they are located in the US and would likely be covered by these new guidelines.
While cash and payment in-kind to bloggers and websites for links has long been a source of pain for search engines, who consider such practices a violation of their terms and conditions, it wasn’t illegal. The rules don’t appear to be targeting specific issues, just a broad disclosure guidance on anything public including celebrity endorsements.
The rules covered a few specific examples where the blogger received a free game console and then posted a review, but didn’t cover the potentiality the company read his blog, liked it and sent a gift. If this were the case, once you received that gift do you then have to go back and update your post to disclose the gift?
These laws are intended to help advertisers comply with the FTC Act and are not binding laws themselves. To ensure the laws are not draconian, the burden of proof is on the Commission to prove the bloggers or celebrities conduct violates the FTC Act.
The biggest problem is that these new rules now have a far-reaching influence over the general public and extend deep into your personal media channels – Twitter, Facebook and MySpace. It seems that these laws are built with double standards: news organisations’ writers are covered, but citizen journalists are not.
If you are thinking of giving your employer a glowing review online you could get yourself, or your employer, in hot water for failing to disclose the relationship. In addition, the FTC must now keep an eye on whether companies uphold the extra requirements to now monitor their staff’s public statements. This guideline seems to have been made without regard to the sheer volume of blogs and bloggers.
The new rules are in effect from 1 December 2009 and include an $11,000 fine per violation.
This guidance does create a massive increase in requirements on advertisers to disclose everything and can make some current social media and search optimisation campaigns too risky to continue beyond 1 December.