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FTC blogger rules chill online speech

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The Tampa Tribune

Published: October 24, 2009

The Federal Trade Commission - the nation's chief regulator of advertising - is trying too hard to keep consumers from being misled by Internet bloggers. The agency's new rules put unprecedented restrictions on freedom of speech.

In the first revisions of regulations on product endorsements and testimonials since 1980, the FTC says that effective Dec. 1, all online writers will have to disclose whether they're getting money or free goods from companies for reviewing products.

The rules don't apply to the old media - newspapers, magazines and TV. That's unfair to the new media - blogs, social networks and personal Web sites.

The real problem of well-financed advertisers masquerading as unbiased reviewers can be solved short of chilling the entire Internet conversation.

The FTC is correct that some bloggers are misleading consumers, who may be unaware that an Internet writer is compensated to tout certain products. The FTC's solution is to require all bloggers to disclose any commercial relationship, such as receiving a free product to review, even if the company sending the product has no control over what the bloggers say and even if the value of the product is small.

A blogger and the company providing the compensation each could be fined up to $11,000 for a violation, and they might even be required to reimburse shoppers.

The FTC is right that reviews and testimonials by ordinary people can be persuasive and that transparency would help consumers make informed decisions. But the nation's founders were wise enough to know that the credibility of the press is not a function of the zeal of regulators.

Already consumers flock to trustworthy Internet sites that are free of commercial bias and are run with journalistic integrity. Credibility is a main selling point of established media outlets that are largely self-regulated.

When the FTC states that "self-regulation works best when backed up by a strong law enforcement presence," every journalist should pay attention.

The FTC defends its regulatory foray into the near infinity of Internet communications by saying that "to the extent that consumers' willingness to trust social media depends on the ability of those media to retain their credibility as reliable sources of information, (regulation) presumably would have a beneficial, not detrimental, effect."

Presumably, the folks at the FTC aren't intimidated by the volume of traffic on Twitter, Facebook and MySpace, to mention a few. Presumably they're not worried that the assumption of federal oversight would give unfair advantage to anyone willing to abuse the system, operate from a foreign country or blog in someone else's name.

The FTC should first target the many Internet pros who receive substantial compensation, and the companies paying it, and see how effective those rules are before going after networking hobbyists. It should try exposing the true marketers, not the amateur reviewers and volunteer bloggers. Anyone earning a living hawking products has entered the advertising business and has invited federal oversight. There are enough of them to keep regulators busy.

Nothing is wrong with a company providing review copies of merchandise of minor value to bloggers. Disclosure should be up to the individual or company, as has long been the practice in newspapers that review books.

Even amid the countless sources of news and opinion on the Internet, the public understands that most professional journalists uphold long-established ethical standards. It is a good reason to rely on established brands for news, opinion and reviews. Individual bloggers must build their own credibility, and many of them have.

It is important that the FTC rule writers make a clear distinction between honest reviewers with an opinion and slick marketers whose opinion has been purchased.

Blurring this distinction will bring unneeded regulatory costs and censorship to the free-flowing Internet conversation.

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