FTC Blogging Rules Draw Online Protests

(CBS/AP)

When the Federal Trade Commission published its regulations on Monday targeting bloggers, the initial reaction was mostly positive. A PC World writer said it was "a good rule," Geek.com applauded the move as "good news for everyone," and Mashable dubbed it an idea whose "time has come."

But now that everyone had a chance to read through the FTC's somewhat-confusing 81 page Federal Register notice, the sentiment has shifted markedly. (In general, the rules mandate disclosure of relationships between bloggers and companies that pay them or supply them with products.)

Slate.com's Jack Shafer has called the rules, which take effect on December 1 and promise fines of up to $11,000, "The FTC's Mad Power Grab." Law professor Eric Goldman thinks the FTC rules conflict with a 1996 federal law, and DailyFinance.com's headline says "the FTC's truth in blogging guidelines are truly terrible." Reason's Tim Cavanaugh, to his credit, noted the problems with the FTC rules on the day they were announced, and the always-insightful Walter Olson at Overlawyered.com believes the rules are far too broad.

Let's stipulate that "payola" and cash-for-blogging exist, though I don't know how extensive they are in practice. And some dodgy gadget review sites may receive products on, ah, permanent loan from their manufacturers, although ethical ones like our sister site CNET.com have an unambiguous published policy saying that if they receive a temporary review unit, "once we've completed our review, the products are returned."

But just because some Web sites are less than ethical doesn't mean the new regulations are sound. One thing that's irked many bloggers is that the FTC regulations -- while technically only a "guide," guidance from an agency with the ability to file lawsuits amounts to regulation -- apply to blogs but not traditional news media. Page 47 of the rules acknowledges "that bloggers may be subject to different disclosure requirements than reviewers in traditional media."

Which leads to plenty of unanswered questions:

- Do the rules apply to writers who are online-only bloggers for sites like NYTimes.com and WashingtonPost.com and don't contribute to the print publication? How about online-only sites like CNET.com and Gizmodo.com? (The regulations explicitly exempt only a "newspaper, magazine, or television or radio station with independent editorial responsibility," not online news organizations or wire services.)

- How to disclose affiliations in the cramped space that Twitter provides? (The FTC confirms that the regulations do apply to a "social networking service," but says only that "there are ways to abbreviate a disclosure that fit within 140 characters," which is not terribly helpful.)

- Do restaurant employees posting truthful statements about their employer on Yelp.com need to disclose their affiliations? The FTC seems to think so, according to AdAge.

- Even temporary loans of an $8,000 digital camera or a $100,000 Porsche 911 Carrera 4S Cabriolet have significant value: a 911 rental in Miami goes for $2,970 a week. Must a review Web site disclose that they received a week-long loaner or face a $11,000 fine? If they must, is a standard disclosure link on each page sufficient, or does this have to be appended to each review?

- If a blogger receives a free pass to a conference like RSA, which charges as much as $2,195 for admission, must he disclose this? What if he's asked to be a speaker, but only for five minutes on a crowded panel? Was that enough to justify what amounts to a four-figure payment?

- When I write about Google, which is not that often, I voluntarily disclose that I'm married to a Google employee; other writers like AllThingsD.com's Kara Swisher have posted even longer disclosures about their Google employee-spouse connections. The FTC wants "disclosure of material connections" -- are spousal paychecks and stock options in a community property state like California "material?" Are bloggers required to disclose their spouse's employer if they're writing about that company or its competitors? How about political bloggers married to politicians or their aides?

- Must bloggers disclose when they receive free admission to political events that normally charge a fee? When I was working at Time Inc., I flew with President Clinton to a fundraiser in a posh Aspen, Colo. home -- everyone except the journalists paid a princely sum to be there.

The good folks at MediaBistro.com have compiled a list of other questions, including: Will the New York Times' "Paper Cuts" or the Los Angeles Times' "Jacket Copy" or "Shelf Life" at Entertainment Weekly be bound by the same FTC guidelines as The Elegant Variation or Smart Bitches, Trashy Books? If not, why not?

Presumably some of the answers will become clear as the FTC continues to explain what it has in mind; see, for instance, what FTC representative Richard Cleland has to say to Ed Champion. (Cleland concludes that review copies of books must be returned, and film bloggers going to screenings must disclose it because free admission counts as compensation.)

Beyond the double standard for newspapers and blogs, the real problem with the FTC's move is that it's trying to regulate a form of expression in an especially wiggly and fluid medium; if U.S. Supreme Court Justice Potter Stewart couldn't define obscenity, don't expect the FTC to be able to define what kind of speech is acceptable and which is not anytime soon.

As law professor Ann Althouse says: "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."

Update 1:25 p.m. ET Fri: Longtime computer industry analyst Amy Wohl asks what this means for consultants who have past, present, or future relationships with vendors they may blog about: "We are not certain where that leaves people like me who use the blogging mechanism to distribute their opinions but who are not writing for consumers, but rather for business people interested in particular concepts and technology topics." And who wants to risk a $11,000 fine to find out?

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Declan McCullagh is a correspondent for CBSNews.com. He can be reached at [e-mail]. You can bookmark the Taking Liberties site here, or subscribe to the RSS feed.

[MendelPotok]

What in the world are you guys talking about? woltommel, it's time to readjust your prescriptions.


http://www.californiabartutors.com

[Transparentzee]

This should apply to all the "independent" analyst firms such as the Gartners, Forresters and the like who claim that they're not swayed by vendor subcription fees during the compilation of the vendor Magic Quadrent and the "wave", etc. These analysts need to state exactly whose paying them next to the vendor rankings. http://www.valleyofthegeeks.com/News/GartnerQuadrant.html

[IndependantObserver]

maybe it is about paid jackasses spewing untruths to the masses like they know the facts. Instead of saying I was paid to say this crap by someone else...free speach is free as long as you aren't an idiot typing what someone tells you and then pays you to write...And that is my own opinion and not something I was paid to say.

[eleanornyc]

It's one thing to try to reduce fraud, or people only saying that they endorse certain things because they've been paid in some way, but this is another example of how, perhaps, the federal government is never quite able to keep up with new technology.

See my post here: http://blogs.journalism.cuny.edu/interactive2010/2009/10/09/bloggers-face-new-restrictions-dec-1/

[bradkt1]

The only people who have a problem with disclosing whether someone is paying them to write a blog are the ones who are being paid. They don't want you to know that...they want to decieve you into believing that they represent the "voice of the people."

Since I am not being paid by anyone and am just speaking my own mind, I have no problem with this.

[brianbwb-2009]

Whoops, there it is.

Not only are you correct, but very clever in your use of the neos rationale against them.

Remember the so-called "patriot act", and warrant-less search? They said they were all for it, and used the rationale "if you are doing nothing wrong, then you have nothing to worry about".

Seems their own logic is now abandoned.

[toldyouso21]

Even more important who or what constitutes a "blogger" is that for people who have their own sites? Does it include those of us who regularly blog on CBS or MSNBC or Digg, or Daily Kos or Huffington Post?
And how do these disclosures tie into the IRS? Isn't the real goal to find additional revenue to tax by making bloggers pay on "compensated blogs even if they never actually received any money?

it is a way to control or put bloggers out of business--more and more Obama and company appears to be a den of snakes and no--FTC--no one has paid me to say that. LOL

[brianbwb-2009]

Playing with semantics is the game of those seeking to skirt responsibility.

Yes, it should apply to those who have their own sites as well as those who contribute to other sites.

If they are compensated bloggers, then they have received income, even if compensation is "in kind", as the items received have a cash value. Trying to escape taxes based on redefinitions of the word "income" is disingenuous, and transparently corrupt.

As for your statement about Obama, all politicians are "snakes", as you put it. Your singling out of the president shows a non material motivation that we all understand, such people don't have to be paid for such, as it is your nature to be so anyway.

Those who use suckers such as your ilk to advance their own agendas can count on you to drink their spew straight from the tap for free, they don't have to pay.

[brianbwb-2009]

As Mr. McCullagh himself states,

"- Must bloggers disclose when they receive free admission to political events that normally charge a fee? When I was working at Time Inc., I flew with President Clinton to a fundraiser in a posh Aspen, Colo. home -- everyone except the journalists paid a princely sum to be there."

Then the flight to the event was income, even if he did not pay for it, airline transportation is a commercial service, anyone flying to Aspen pays the cost of a ticket to fly there.

Would you have gone had there not been free flight and free admission?

If yes, then you would have had to pay these costs. if no, then there was no income.

Admission the the event, if it was a private function, is not, as you are there by invitation.

Yes the same guidelines you would use on an honest tax form should apply.

You received free airfare, that is income, and then any compensation for journalism you created because of it was also income generated from the attendance of the event.

There seems to be the faint but foul aroma of "someone with something to hide" in this article.

[bajajohn1]

This article does not connect in the sense the policy goals are not explained so the reader has an understanding of what the writer is trying to convey. Seems the writer is trying to say, that 'commercial relationships' in touting some product or service on blogging services have to be disclosed. As Ricky Ricardo would say, "FCC you have some esplaining to do."

[brianbwb-2009]

Bloggers are quite clever inventing new words, like for example "pwned".

To invent a word that conveys a material interest in the subject matter would be easy, and not have to take up a lot of space, like perhaps "ptp", (paid to post) before, or after the text.

Anyone trying to avoid disclosing knowledge of such automatically displays a hidden agenda, part of which is paid information, or paid disinformation, passing as actual personal communication.

The author says "Let's stipulate that "payola" and cash-for-blogging exist, though I don't know how extensive they are in practice."

Well if the author actually wanted to know it is an easy matter to ask the site admins here how many spam blogs touting paid "find a s-ex partner" sites, or like the more recent fake clothing spam, that they block, or receive complaints about.

[brianbwb-2009]

Bloggers are quite clever inventing new words, like for example "pwned".

To invent a word that conveys a material interest in the subject matter would be easy, and not have to take up a lot of space, like perhaps "ptp", (paid to post) before, or after the text.

Anyone trying to avoid disclosing knowledge of such automatically displays a hidden agenda, part of which is paid information, or paid disinformation, passing as actual personal communication.

The author says "Let's stipulate that "payola" and cash-for-blogging exist, though I don't know how extensive they are in practice."

Well if the author actually wanted to know it is an easy matter to ask the site admins here how many spam blogs touting paid "find a s-ex partner" sites, or like the more recent fake clothing spam, that they block, or receive complaints about.

[johnthecableguy]

The People spoke - they wanted change. Well, here it is. This internet/social networking thing just doesn't fit in with a totalitarian government.

Baby steps....

[jschmidt27]

It's very simple folks. Just as you write for a blog or anywhere on the web, have your lawyer who is on retainer sit next to you and advise you. You can look at this as Obama full employment for lawyers program. Welcome to the big brother, nanny state. You elected him-don;t look at me.

[stuart-johns2]

Nobody IS looking at you...for a comment anyway.

[brianbwb-2009]

Totally understandable that those who have a problem with the truth would be opposed to disclosure.

[stuart-johns2]

So that's what happened to the republican extremist trolls and paid shills that have not been around lately. I was wondering what happened to their dwiddling ranks among us.

[John_Merritt]

No it is just they have more important things to do with their lives.

[woltommel]

MRS. TWO NAMES,, only one question, is it paukystaun or Afghanistan.
We really want to know. Stan is stan is stan. Not sure where the poaukystaun came from????? staun, pauky oumm???