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Trusting the blogosphere

Is the FTC's focus on enforcing Internet advertising standards more heavy-handed than with traditional media?

October 07, 2009

The Federal Trade Commission has updated its guidelines for advertisers, making clear that the 95-year-old federal law against deceptive and unfair practices also applies to the brave new world of blogs and social networks. The commission would be right to treat the Internet the same as any other communications medium -- there should be no safe harbor for false claims about weight-loss products or multilevel marketing schemes. But in its zeal to distinguish honest voices from paid shills, it appears to have set a tougher standard for blogs than for traditional media.

The new guidelines focus on endorsements and testimonials by celebrities and consumers. The changes, which take effect Dec. 1, include a welcome effort to close a loophole that allowed grossly misleading claims as long as they were accompanied by the fine-print disclaimer, "Results not typical." That's an easy target for regulators to hit, though. The commission's aim wasn't as good when it addressed marketing techniques that blur the line between advertising and unsolicited opinions.

The Web and social networking tools such as Facebook and Twitter have elevated individuals' influence and transformed word-of-mouth into a global force. Recognizing the shift, some marketers have tried to insinuate their pitches into the grass-roots commentary, often by rewarding the people who sing their products' praises. Under the new guidelines, wherever an advertiser sponsors a message, its involvement has to be disclosed. But the commission's examples of what constitutes sponsorship set an unreasonably low threshold for blog posts to be treated as ads, potentially turning ethical lapses into violations of federal law. Merely receiving review copies of games, gadgets or discs for free -- as critics in traditional media routinely do -- could bring bloggers under the FTC's purview. The commission argues that the guidelines probably wouldn't apply to professional journalists, and that amateur bloggers would just have to disclose the freebies. Yet the risk of $11,000 penalties could easily discourage some would-be reviewers and harm sites that rely on amateurs to rate products and services.

There's also a practical problem. E-commerce sites and social networks are generating an overwhelming amount of information about products and services, only some of which is genuine. Yet the best thing about the Internet is that the masses do a remarkable job of calling out fakery and unethical behavior. Many websites help in this process by giving users effective tools for rating a reviewer's credibility. The result is a wealth of feedback that provides great insights for consumers. As it tries to crack down on deceptive practices online, the FTC should take care not to cut off that flow of information.

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