Four Things the FTC Can Do To Fix Its Assault on Free Speech

October 15, 2009

After 25 years, we still don’t understand what the Internet is.

At least that is the more charitable view of the Federal Trade Commission’s new regulations that will fine bloggers who endorse a product without disclosing any free samples or other compensation that they received.

The less charitable view would be that the FTC is using a minor annoyance (blogging shills) as an excuse for a vast power grab and restriction of free speech.

As the Supreme Court recognized in a landmark 1997 ruling, speech on the Internet is closer to speech in books or the public square than it is to broadcast media like radio or television.

And yet, in its new regulations, the FTC fundamentally mistakes blogging for a mass medium, like radio or television, whose publication is limited to a few large institutions broadcasting messages to a large audience. In reality, there are approximately 200 million blogs around the world (throw in 50 million Twitter accounts and the status updates of Facebook’s 300 million users, and you’re starting to get some real numbers here). The vast majority of blogging is not by influential platforms read by millions, but by individual bloggers publishing for a miniscule audience of friends and acquaintances.

To attempt to regulate speech (however sleazy and deceptive) on “blogs” is not at all equivalent to regulating speech on radio or television. What it is equivalent to is trying to regulate all speech printed on “paper” – newspapers, office memos, classroom handouts, post-its, and handwritten notes on your kitchen fridge.

I surely hope the FTC will quickly kill its regulation, and not force the courts to rule on the disastrous precedent it is setting.

If the FTC truly feels that bloggers flogging shampoo that they get for free is an affront that demands government action, I suggest they scrap their rules and start over with an approach based on the following:

  1. Regulate only those who solicit undisclosed endorsements. Companies that pay endorsers would need to take steps to ensure their gifts are clearly disclosed by recipients, and to cut off the goodies to any endorsers who fail to disclose in the future. Bloggers themselves would not be regulated.
  2. Make a distinction between giving free sample products vs. cash or additional gifts. I should be able to give out free cupcakes in front of my bakery without a disclaimer. But if I fly 50 bloggers to an all-expense weekend in Miami so I can ply them with products, I would need to request that they disclose this when talking about the products, and make a good faith effort to follow up and de-list anyone who repeatedly fails to disclose. (A minimum value for gifts requiring disclosure could also be set, say $500 per year.)
  3. Apply the rules to every media… As the law currently stands, magazine editors are still not obligated to disclose all the free products they receive, while your mother with 12 people following her on Twitter can be fined $11,000 for posting about the same thing.
  4. … and yes, even spoken speech. The rules should apply to those who solicit verbal endorsements as well, including “word of mouth” marketing agencies like BzzAgent. If you can’t write a law that’s constitutional in regulating spoken speech, then it isn’t fit to regulate speech on the Internet.

Actually enforcing such a policy might seem daunting, but it would involve policing thousands of companies and marketing agencies, rather than the hundreds of millions of citizens using social media who are covered by the current law. In large part, it could be enforced by the community ratting out the most egregious violators.

How about it, FTC? Can you rewrite this to make constitutional sense under our Bill of Rights?

If not, just admit your mistake and kill the new rule.

Disclosure: David Rogers is the Executive Director of the Center on Global Brand Leadership at Columbia Business School. He received no cupcakes while writing this post.

BY DAVID ROGERS

This post originally posted by David on the BRITE Conference blog at: http://www.briteblog.net

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