I wrote a news item for Fortune today on the FTC’s new guidelines for advertising and consumer endorsements on the web. Basically, the guidelines require disclosure of any material connections–money changing hands–between companies and bloggers.
“The issue here,” says Cleland, “is whether, if the consumer knew of the relationship between the advertisers and the blogger, would it affect the credibility of the blogger’s statements?” If so, the new guidelines would permit the FTC to demand that the blogger disclose the connection, with failure to comply resulting in fines as high as $11,000.
The problem, critics contend, is the lack of clarity in the FTC Guides on what will constitute a violation. Beyond direct payments from companies to reviewers in exchange for specific coverage, the guidelines seem to extend to consumer and personal websites where advertising content and editorial content overlap.
One thing that came up in my reporting that I didn’t get a chance to address in the piece is the question of whether blogs are a publishing medium where conflicts of interest are a form of commercial corruption, or just equivalent to individual speech, in which case the government can’t regulate them at all. In this case, the FTC is treating blogs as a publishing medium, at the expense of the many individuals who use the platform simply to carry on personal conversations.
Meanwhile, the FCC seems to be approaching the internet as a form of speech and therefore pushing net neutrality on the grounds that all speech must be treated equal. That approach takes away all the specific protections that commercial content is premised upon (like intellectual property rights), even as that publishing is about to move online.
Meanwhile, Congress, which oversees both agencies, is trying to draw a line in the middle of the blogosphere between those who use blogs as a publishing form–and get special rights but also stricter rules as a result–and those who are just speaking. The Congressional shield bill may be doomed now that it’s lost White House support, but I think in principle, some way of distinguishing commercial from non-commercial content online is going to be necessary.
What frustrates me most, however, is how easy it is for the two agencies to put into law two conflicting definitions of the same space–the net–without anyone raising questions about the inherent contradictions between their approaches. It’s a clear case where some regulatory consolidation is needed.