FTC Cracks Down on Bloggers Who Take Perks (Take Two)

(MoneyWatch)  After posting my earlier report on those proposed new FTC rules this morning, I've had an opportunity to review the actual document (available both in HTML and as a PDF) issued by the commission.

I'm no lawyer, but this document is so long and sweeping in nature that I'm beginning to grow concerned that it may represent a case of regulatory intervention gone wild.

Some of the marketing and advertising organizations quoted in the ruling raised concerns that I very much share:

• "If the Commission were to adopt guidelines addressing new media without a sufficient understanding of how such new technologies are being harnessed or may be used in the future, the Commission might risk dissuading the development of novel means of advertising that effectively serve the interests of consumers in ways not yet imagined."
• "[R]egulating these developing media too soon may have a chilling effect on blogs and other forms of viral marketing, as bloggers and other viral marketers will be discouraged from publishing content for fear of being held liable for any potentially misleading claim."
• "The Commission recognizes that because the advertiser does not disseminate the
  endorsements made using these new consumer-generated media, it does not have complete
  control over the contents of those statements. Nonetheless, if the advertiser initiated the process
  that led to these endorsements being made ?€"- e.g., by providing products to well-known bloggers
  or to endorsers enrolled in word of mouth marketing programs ?€"- it potentially is liable for
  misleading statements made by those consumers."

Note that these are just three of many objectionable scenarios in what is an extremely sweeping ruling. There are case studies listed covering everything from the nuances of promoting dogfood on your personal blog, to whether celebrity banter involving product placement in videos where the celebrity never speaks constitutes an endorsement.

As I begin to familiarize myself with these details, I'm developing serious qualms about the FTC asserting its control over the realm where I work. This long, complex document looks more like an excuse to keep a lot of lawyers and other federal regulators employed than a credible effort to clean up a problem of unknown dimensions -- secret acceptance of free gifts by bloggers and other social media power users in order to promote products.

To date, I have seen little hard evidence that any significant number of bloggers are doing this. Rather than authorize an expensive bureaucratic solution for a problem that may or may not exist, therefore wouldn't it make more sense for bloggers, marketers and advertisers to adopt a voluntary code of conduct? (Not that I have any idea how we would ever develop and agree on such a code.)

I'm not naive; I know that voluntary codes will never stop the corrupt from acting corruptly. But it might give the rest of us the incentive to impose a type of community-policing oversight of our colleagues who promote things without the heavy hand of the government coming in and stifling our freedoms.

Because, at the end of the day I am beginning to suspect that a much dearer principle may be at stake in this matter that product endorsement irregularities, and that is the First Amendment.
Stay tuned. I'm sure there will be more to say on this important topic.