FTC New Disclosure Guidelines, a Third Examination [Bloggers, Marketers and PR]

image_thumb6I spent the bulk of my Memorial Day entrenched in the eighty-six page document put out by the FTC containing the new endorsement guidelines that we discussed on CobWEBs last week as well as here at SiliconANGLE over the last month (here and here).

I had based my two previous posts based on information I learned through phone conversations with FTC media representatives and folks who function as legal experts for various industries partially or totally governed by the purview of the FTC.

As it turns out, these new rules (as are the old rules) a whole lot less nuanced and image even more troubling than we’ve been lead to believe by articles from BusinessWeek, Forrester and Brian Solis.

First, it’s important to note that in the BusinessWeek article last week, and in the Forrester blog the other day, neither article referenced the proposed changes, and instead either alluded to unnamed changes or referenced agreement with the thirty year old guidelines regarding endorsement disclosure rules. Only Brian Solis seemed to have found the newer link for the proposed guideline changes.

My first questions, after having read in laborious detail the entirety of the proposed guidelines is how folks like Brian Solis (see second update at bottom) or Forrester could give their stamp of approval to these documents that clearly show that the FTC has a hate-on for the blogosphere. As Duncan Riley pointed out in his write-up of the new proposed guidelines:

While in principle it’s a sound idea, and one that most people wouldn’t oppose, it’s the application that is anything but just, because it makes no attempt to strictly enforce the same rules on mainstream media outlets, and specifically newspapers, despite the suggestion from the FTC that those outlets are currently operating under higher standards.

The truth is, though, that both mainstream outfits as well as indie bloggers fall well within the definition non-disclosed compensation that the FTC warns of:

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. The readers of his blog are unlikely to expect that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact would likely materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

If you take this as the litmus test as to whether or not a breach of ethics has happened, then you’ve got serious offenses with organizations like the New York Times, Engadet and Gizmodo and even Mashable and Techcrunch.

While it’s been obvious to the blogging elite that David Pogue is one of the elite few to get free early looks at Apple consumer electronics products, is it obvious to every reader of his reviews?

Thousands of Bloggers Liable for Millions of Dollars
image Engadget and Gizmodo regularly get tons of free stuff to review, and though they may casually remember to mention that they were sent items from the companies they’re reviewing, do they meet the legal obligations of disclosure when it comes to the price they received it for or whether for free, and if the company is under any illusions on whether or not this was an exchange for positive coverage or just a quest for them to get some press at all, regardless of it’s tone.

Even Web 2.0 and social media bloggers aren’t out of the woods. Most online services reviewed at Mashable and Techcrunch are free services, but on a fairly regular basis, I know from my own experience, that free access is given to paid systems.  That, right there, is exactly the sort of situation in which the FTC determines the need for disclosure.

Here’s the kicker – these new guidelines aren’t reflective of new policies, but indicative of current attitudes held by the FTC. The debate is not over whether or not these should be FTC policy, but whether this new verbiage should be included in the updated guidelines for public disclosure rules.

Bloggers, Social Media Consultants and PR People are All Liable
This means, as these organizations currently exist, Mashable, Techcrunch, Gizmodo, Engadget and the New York Times (as well as thousands of other media organizations that publish in blog format) are liable for a potential combined total of millions of infractions, all punishable by the full weight and force of the Federal government.

If they want to limit their liability and prevent themselves from being sued back into the stone-age, they’ve either got to hire forensic legal assistance to comb through all past posts and determine where appearances of impropriety may have occurred, or just simply close up shop, whichever is cheaper.

Based upon my extensive analysis today of the FTC rules, my previous analysis regarding public relations professionals and social media consultants being just as liable for Twitter mentions stands as well.

What we simply have here is a grossly mis-informed stance from the FTC, and an overall untenable position. My suspicion is that because the FTC guidelines seem to be in line with what Solis and Forrester view as best practices may be guiding their support of the new rules.  What they both fail to realize is that there are much further-reaching implications to these new rules that quite simply extend far beyond what ought to be the purview of the FTC.

image_thumb7 [Update: Steven Hodson, Sean P. Aune and I all spent a good half hour discussing this topic on the CobWEBs podcast, delving into more of the details I learned after this item was posted.  Our general take? The FTC isn’t fully aware of the ramifications of their actions. Click here, or below to listen to the podcast.]

[Update 2: Brian Solis commented below to clarify that he hasn’t given his stamp of approval at all to these new guidelines. My perception that he had was mistaken. –mrh]