Earlier today the US Federal Trade Commission published its updated and final guidelines for governing endorsements and testimonials with several changes to outdate the 1980s version. This update has been discussed in various posts on a number of popular blogs for several months but most commentary seemed to play down the width of the guidelines and if even made sense. While this guidance will likely not yet affect everyone initially the move will likely guide other countries to reconsider their outdated media laws to keep pace US laws. The new rules are in effect from the 1st December 2009 and include an $11,000 fine per violation.
It needs to be examined can the FTC pass laws that affect the entire internet? There is a concept of net neutrality and this sweeping guidance like this cannot be a good path to follow for any government department. With US media outlets are already screaming murder as these rules can potentially violate bloggers free speech under the First Amendment rights.
The bigger issue not yet discussed is the location and hosting of many popular social media services and blogs as they are located within the USA and would likely be covered under these new guidelines.
While cash and payment in-kind to bloggers and websites for links has long been a source of pain for search engines who consider such practices in violation of their terms & conditions it wasn’t illegal. The rules don’t appear to be targeting specific issues, just a broad disclosure guidance on anything public including celebrity endorsements.
The rules covered a few specific examples where the blogger received a free game console and then posts a review, but doesn’t cover if the company read his blog and liked it and sent a gift. Once you have received that gift do you then have to go back and update your post to disclose the gift?
These laws are intended to help advertisers comply with the FTC Act and are not binding laws themselves. To ensure the laws are not draconian the burden of proof is on the Commission to prove the bloggers or celebrities conduct violates the FTC Act.
The biggest problem is that this new rules now cover a far reaching influence over the general public and extend deep into your personal media channels of Twitter, Facebook & Myspace. It seems that these laws are built in with double standards with writers for News organisations covered but not citizen journalists.
If you are thinking of giving your employer a glowing review online you could get yourself or your employer in hot water for failing disclose the relationship. The extra requirements for companies to monitor staff’s public statements without even considering the sheer volume of blogs and bloggers the FTC must now monitor.
This guidance does create a massive increase in requirements on advertisers to disclose everything and can make some current social media and search optimisation campaigns too risky to continue beyond 1st December.