The Burnman Experience
19Aug/090

FTC endorsement regulations already apply online

FTC Headquarters
The Asso­ci­ated Press recently announced that the Fed­eral Trade Commission’s “Guide Con­cern­ing the Use of Endorse­ments and Tes­ti­mo­ni­als” will be revised soon.  All week, arti­cles have been pop­ping up across the Inter­net report­ing that these changes will intro­duce reg­u­la­tion of blogs and blog­gers by the FTC.

What they fail to report, is that FTC reg­u­la­tions already apply to blog­gers and their blogs.  In fact, these reg­u­la­tions apply to use of email, Twit­ter, Face­book, MySpace, just to name a few.

Blogs and dis­cus­sion boards are both dis­cussed in the FTC’s “Guide­lines Con­cern­ing the Use of Endorse­ments and Tes­ti­mo­ni­als in Adver­tis­ing, Notice of pro­posed changes,” but not as newly reg­u­lated media.  The pend­ing changes to the guide intro­duce new exam­ple sce­nar­ios intended to illus­trate how FTC reg­u­la­tion may apply in some sit­u­a­tions.  The guide is not the def­i­n­i­tion of the law, nor does it encom­pass every pos­si­ble sce­nario in which the FTC can take action.  The sole pur­pose for the guide is to act as, well, a guide.

It appears that some jour­nal­ists cov­er­ing the pend­ing changes to the FTC guide failed to do any actual research into the law behind the guide, and how it applies to the Internet.

“This would, for the first time, bring blog­gers under FTC guide­lines that ban decep­tive or unfair busi­ness practices.”

- Car­o­line McCarthy, CNET — “Report: FTC to go after blog­ger free­bies

While the pend­ing changes will clar­ify pol­icy as it relates to “new media” such as blogs, the laws behind the guide haven’t actu­ally changed.  Spend­ing just a few min­utes on the Fed­eral Trade Com­mis­sion web­site turned up plenty of infor­ma­tion related to how FTC reg­u­la­tion applies to the Internet.

“The Inter­net is con­nect­ing adver­tis­ers and mar­keters to cus­tomers from Boston to Bali with text, inter­ac­tive graph­ics, video and audio. If you’re think­ing about adver­tis­ing on the Inter­net, remem­ber that many of the same rules that apply to other forms of adver­tis­ing apply to elec­tronic mar­ket­ing. These rules and guide­lines pro­tect busi­nesses and con­sumers — and help main­tain the cred­i­bil­ity of the Inter­net as an adver­tis­ing medium.”

“The FTC Act pro­hibits unfair or decep­tive adver­tis­ing in any medium.”

- Excerpts from “Adver­tis­ing and Mar­ket­ing on the Inter­net: Rules of the Road

This means that any adver­tise­ment, endorse­ment, or tes­ti­mo­nial on the Inter­net should already be in com­pli­ance with FTC reg­u­la­tions.  With more and more atten­tion being paid to online mar­ket­ing by the agency, Inter­net mar­keters who have long enjoyed the lack of enforce­ment would do well to attempt com­pli­ance with the law.

“The same con­sumer pro­tec­tion laws that apply to com­mer­cial activ­i­ties in other media apply online. The FTC Act’s pro­hi­bi­tion on ‘unfair or decep­tive acts or prac­tices’ encom­passes Inter­net adver­tis­ing, mar­ket­ing and sales. In addi­tion, many Com­mis­sion rules and guides are not lim­ited to any par­tic­u­lar medium used to dis­sem­i­nate claims or adver­tis­ing, and there­fore, apply to online activities.”

“In addi­tion, the Guides Con­cern­ing the Use of Endorse­ments and Tes­ti­mo­ni­als in Adver­tis­ing apply to endorse­ments, which are defined as any adver­tis­ing mes­sage… [that] con­sumers are likely to believe reflects the opin­ions, beliefs, find­ings, or expe­ri­ence of a party other than the spon­sor­ing adver­tiser. The Guides refer to adver­tis­ing with­out lim­it­ing the media in which it is dis­sem­i­nated, and there­fore, encom­pass online ads.”

- Excerpts from the FTC guide, “Dot Com Dis­clo­sures” [PDF]

While I cer­tainly think the FTC will be tak­ing a more active role in mon­i­tor­ing online adver­tis­ing prac­tices, the idea that such prac­tices are only just now being reg­u­lated by the FTC is sim­ply not true.

I am forced to won­der if Facebook’s deci­sion to crack down on paid sta­tus updates relates to the FTC’s new-found inter­est in web mar­ket­ing over­sight.  Per­haps we will see Twit­ter fol­low suit, and ban spon­sored Tweets.  I cer­tainly hope so.

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