The Recession

FTC to Patrol Companies Who Compensate Bloggers

| by CEI

So much for the idyllic “free information” model of the internet. The Federal Trade Commission is drafting new rules that would extend its authority to encompass bloggers who promote products in exchange for compensation or giveaways. The FTC’s new oversight could be quite extensive, even covering the common marketing practice of affiliate links, as the Associated Press reports:

New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest. It would be the first time the FTC tries to patrol systematically what bloggers say and do online. The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.

While professional journalists in print or broadcast media are held to strict standards (they usually can’t receive gifts or payments), Internet bloggers need not subscribe to any common code of ethics. However, government oversight in the blogosphere seems a bit drastic and unnecessary. It’s one thing for the FTC to enforce guidelines on electronic advertising conducted by tax-exempt organizations, corporations, or bloggers officially affiliated with them. But applying these rules to independent, small-time consumer product reviewers and noncommercial bloggers who use AdSense oversteps any reasonable exercise of regulatory power in the name of “consumer advocacy.” The FTC even wants to extend its reach to Twitter and other social media services. Perhaps Twitter will have to increase its 140-character limit if users who tweet about a product will be required to include a “#CompensatedReviewFTCCompliant” hashtag.

These new regulations - specifically, the threat of an FTC investigation - could have serious consequences for the availability of information on the Internet. When the FCC regulated political content on broadcast radio in the 20th century, the result was a “chilling effect” on political speech. Broadcasters stopped providing potentially controversial content for fear of an FCC investigation. Unsurprisingly, our government has not learned its lesson. The AP continues:

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A police officer saw a young black couple drive by and pulled them over. What he did next left them stunned:

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Between ads on her five blogs and payments from advertisers who want her to review products, Rebecca Empey makes as much as $800 a month, paying the grocery bill for a family of six. She also has received a bird feeder, toys, books and other free goods. Now the 41-year-old mother of four in New Hartford, N.Y., worries that even a casual mention of an all-natural cold remedy she bought herself would trigger an FTC probe.

Last, there’s the obvious problem of manpower. The feds couldn’t possibly believe that they have sufficient resources to monitor the entire blogosphere, could they? Add to that the Twitter timeline and all those public MySpace pages, and you’re looking at a pretty long list. Let’s not forget the millions of Internet message boards - surely those would be included, too. Who’s going to regulate those blogs not based in the U.S.? Cnet’s Caroline McCarthy sums it up best:

…does the FTC realize just how many small-time bloggers are out there? Championing business ethics is a worthy goal, but, um, good luck getting much done when there are hundreds of thousands of blogs out there and new ones popping up more or less daily. Ever heard of the expression “herding cats?”

Consider this more evidence that government attempts to enforce any kind of content regulation over the Internet are almost always short-sighted, heavy-handed, and usually lack any technological understanding. Certainly, bloggers ought disclose compensation arrangements, gifts, and conflicts of interest, and most reputable bloggers already do, but do we really need the FTC to keep its eye on every amateur blogger with a coupon? While it may be desirable for the FTC to promote competition and fair business standards in some contexts, going after blogs is another example of the government injecting itself where it’s neither needed nor welcome.