An Open letter from Randall Rothenberg to FTC Chairman Jon Leibowitz, calls on FTC to rescind Blogger rules.
Jon Leibowitz, Chairman
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Dear Mr. Chairman:
So there I was last Saturday, about to send out on my Twitter feed — which automatically updates my Facebook page and links to my personal blog
— a photograph of this wonderful baked halibut dish I’d just made as a
surprise for my wife. I was in the middle of typing a rave review of
the recipe, which I’d pulled from my favorite cookbook, Delicioso! The Regional Cooking of Spain by Penelope Casas. But before I could press the “post” button, I stopped and canceled the whole thing.
I
remembered that the book was a freebie, sent to me by an editor at the
Alfred A. Knopf publishing house 13 years ago. And I didn’t want you
guys to haul me into court and fine me for violating the rules you’ve
just promulgated to muzzle social media.
I
know what you’re thinking – I’m just confused. But so are the 22
million bloggers currently collecting audiences in the United States
and the nearly 140 million Americans registering news and opinions
through social media channels like Facebook, MySpace, Friendster, and
Twitter. The source of the confusion: The new set of Guides Concerning the Use of Endorsements and Testimonials in Advertising, issued on October 5 by the Federal Trade Commission that you chair.
As you’re undoubtedly aware, the revised Guides, an update of principles the Commission originally established in 1980, have generated a firestorm of controversy within the ad-supported interactive media industry. Of particular concern are footnotes, asides, and elaborations in the Guides –
as well as reported commentary by Commission staff – which indicate
that opinions published by individuals have less protection than speech
promulgated by large corporations; that “traditional” distribution
channels deserve more protection than innovative online channels; and,
finally, that the Internet, the cheapest, freest, most accessible
communications medium ever invented, should have less freedom than
other media.
Different Disclosure Requirements
It’s the Commission’s own words that have sewn this controversy and confusion. On pages 47 and 48 of the 81-page Guides, your staff
…acknowledges
that bloggers may be subject to different disclosure requirements than
reviewers in traditional media. In general, under usual circumstances,
the Commission does not consider reviews published in traditional media
(i.e., where a newspaper, magazine, or television or radio station with
independent editorial responsibility assigns an employee to review
various products or services as part of his or her official duties, and
then publishes those reviews) to be sponsored advertising messages.
Accordingly, such reviews are not “endorsements” within the meaning of
the Guides…
In
contrast, if a blogger’s statement on his personal blog or elsewhere
(e.g., the site of an online retailer of electronic products) qualifies
as an “endorsement” – i.e., as a sponsored message – due to the
blogger’s relationship with the advertiser or the value of the
merchandise he has received and has been asked to review by that
advertiser, knowing these facts might affect the weight consumers give
to his review.
With
all due respect, Mr. Chairman: Huh? Does the FTC really intend to probe
America’s opinion-mongering apparatus this closely? Do you have a team
of Freuds and Jungs able to examine “the weight” consumers give such
opinion – and the way they weigh that weight?
Naturally,
this expedition from Oceania – that’s the place Big Brother ruled –
should be worrisome to all Americans, and to all viewers, readers,
listeners, users, and providers of any communications medium. But for
the 400 members of the Interactive Advertising Bureau,
most of which are small and medium-sized enterprises struggling to
build their businesses in the face of the worst decline in marketing
spending since the 1930’s, the implication that online social media
represent a separate class of communications channels with less
Constitutional protection than corporate-owned newspapers, radio
stations, or cable television networks is of particularly grave
concern.
They
– and we — are not arguing that bloggers and social media be treated
differently than incumbent media. After all, most newspapers,
magazines, radio stations and television networks, in recognition that
Americans are embracing new forms of social communications, have
established their own blogs, boards, Facebook pages, Twitter feeds, and
the like. Rather, we’re saying the new conversational media should be
accorded the same rights and freedoms as other communications channels.
Stop Deceptive Advertising
All
of us would agree that false and deceptive advertising should be
stopped, and penalized when it slips through and is caught. We agree
that paid testimonials and endorsements should be labeled. But in
taking business ethics and attempting to give it the force of law, the
Commission is stretching the definition of remuneration to ludicrous
lengths. More frightening – certainly to the 22,000 womens-issue
bloggers” on BlogHer, the 218 sports-fan facilitators on SB Nation, and the 302 people Tweeting to me daily – is that the FTC’s new Guides open
the door to extremely selective pursuit and prosecution of those least
able to defend themselves against government’s hammer: the solo
entrepreneurs and opinionated individuals who are most vital to the
functioning of our democracy and economy.
That fear, I fear, is supported by the Commission’s own words. For example, in an interview with the blog edrants.com,
FTC Assistant Director of Advertising Practices Richard Cleland took
decades of common practice in offline media — specifically the
acceptance by reviewers of free books from publishers — and said that
bloggers engaging in the same activities could be subject to
prosecution. “The primary situation is where there’s a link to the
sponsoring seller and the blogger,” said Mr. Cleland. The repeated
supply of free books could constitute “compensation,” thus triggering
an FTC review and, possibly, sanctions.
“You
can return it,” Mr. Cleland said, when asked how a social mediator
could avoid this fate. “You review it and return it. I’m not sure that
type of situation would be compensation.” Otherwise, “if a blogger
received enough books, he could open up a used bookstore.”
The
ignorance of established offline media practices is more than mildly
surprising. Take a walk through New York’s mecca of used books, The Strand, or the Portland emporium Powell’s,
and you’ll find bin upon bin of “reviewers’ copies,” direct
contravention of Mr. Cleland’s declaration that “most of the newspapers
have very strict rules about that and on what happens to those
products.” (My own shelf of review copies from my days as a journalist attest to how wrong he is.)
Shackle Online Media
But
of greater concern is that the Commission is translating this ignorance
into rules that would specifically shackle online media while exempting
our offline cousins and competitors from equivalent constraint.
Publish? You might perish: “Consumers who join word of mouth marketing
programs that periodically provide them products to review publicly (as
opposed to simply giving feedback to the advertiser) will also likely
be viewed as giving sponsored messages.” Have a lot of Facebook
friends? Better watch it, you dot-commie: “If that blogger frequently
receives products from manufacturers because he or she is known to have
wide readership within a particular demographic group that is the
manufacturers’ target market, the blogger’s statements are likely to be
deemed to be ‘endorsements.’”
Indeed,
to copious industry protests that provision of free samples, tickets,
and services to independent reviewers has been a staple of media since
media began and shouldn’t be regulated more strictly online than off,
the Commission simply disagreed and said it will “consider each use of
these new media on a case-by-case basis for purposes of law
enforcement.” So if Niero Gonzales fails to flash “freebie” across each
review of a first-person shooter posted on his gamer site Destructoid.com, will he be dragged down to Pennsylvania Avenue for a civil investigation? If
I blog on randallrothenberg.com about the dozens of free management
books I receive each year from publishers, will I, John Wiley &
Sons, or Harper Business be subject to a penalty? Again with all due respect, Mr. Chairman, the Commission’s Guides really provides no guidance at all.
You must know that, because in the days following the release of the revised Guides,
the FTC has been furiously backtracking about their implications, in an
apparent attempt to soothe the blogosphere. “We are not planning on
investigating individual bloggers,” Mary Engle, the Commission’s Associate Director for Advertising Practices, told reporters this week. “We will be focusing any enforcements on advertisers, not on individual endorsers.”
But
the Commission is being disingenuous. “The recent creation of
consumer-generated media means that in many instances, endorsements are
now disseminated by the endorser, rather than by the sponsoring
advertiser,” the Guides state. “In these contexts, the Commission believes that the endorser
is the party primarily responsible for disclosing material connections with the advertiser.”
Individuals More Liable
In other words, the Guides DO allow you to pursue bloggers. They DO hold individuals more liable than larger corporations. They
DO explicitly say online social media have less protection than offline
corporate media. They DO obstruct online companies’ opportunities to
drive cultural conversation more than offline companies’. They DO
threaten with prosecution book publishers, movie producers, and other
companies that supply products to individual social media
conversationalists.
This
confusion easily could have been avoided. The IAB and other industry
organizations clearly identified the risks to free expression and provided the FTC significant, formal First Amendment guidance
when you first mooted the new guidelines earlier this year. We offered
to bring in bloggers, social media executives and others from among our
membership and work with you to develop practical guidelines and
self-regulatory mechanisms that would protect consumers from real harm,
while assuring that independent opinion in digital media isn’t stifled.
But
Commission staff did not follow up with us on our offer, held no public
hearings on the proposed Guides, and ultimately dismissed our concerns.
Instead, they took the perverse - and Constitutionally dubious - step
of saying that individuals writing in social media bear greater
liability than do those writing for offline, one-way media.
Mr.
Chairman, these are the types of vital regulatory issues that, if
decided without due care and reasoned judgment, will impair the
continued growth of news and content in the online space. I
urge the Commission to retract the current set of Guides and to
commence a fair and open process in order to develop a roadmap by which
responsible online actors can engage with consumers and continue to
provide their invaluable content and services.
Regards,
Randall Rothenberg
President and Chief Executive Officer
Interactive Advertising Bureau
Subscribe to IABlog
But
Rep. Boucher (shown left) isn’t putting only Internet infrastructure at
risk. His most disturbing proposal is to place the burden for consumer
privacy protections on individual Web sites - on the local newspaper’s
dot-com affiliate, the cable network’s online feed, and the solo
blogger alike. His legislation would force all publishers to implement
cumbersome and expensive means to stop ad-distribution to any consumer
who demands it, and shatter the systems that enable publishers to
provide advertisers reliable measures of their circulation and
advertising delivery – the currency that enables publishers to get paid
for their work.
I urge you to 
and just for 
