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Jun 5, 2011

FTC Looks to Revise Online Advertising Guide

(cross posted at the Citizen Media Law Project)
 Eighteen months after the Federal Trade Commission revised its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," including revision of rules regarding product and service endorsements by bloggers and other social media contributors, the agency has announced that it is planning to revise its general guidelines for online advertising, which it released in 2000. Currently the Commission is soliciting comments regarding the revision.

The fundamental gist of the 2000 guidelines, published under the title "Dot Com Disclosures: Information About Online Advertising," was that "[t]he same consumer protection laws that apply to commercial activities in other media apply online," including requirements for "clear and conspicuous" disclosures. The 2000 guidelines also state that existing restrictions on solicitations by direct mail apply equally to e-mail.

But the 2000 guidelines do not discuss application of FTC rules to newer forms of Internet and electronic communication: including social media, which barely existed at the time. As the Commission stated in announcing the revision, "Since the FTC staff published Dot Com Disclosures, mobile marketing has become a reality, the 'App' economy has emerged, the use of 'pop-up blockers' has become widespread, and online social networking has emerged and grown popular."

As I've discussed before, the Commission did address social media in its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," and declared that bloggers and other social media posters who mention a product or service must disclose when they any compensation for that mention, including freebies or discounts. But the Commission added that "bloggers may be subject to different disclosure requirements than reviewers in the traditional media."As justification for this, the Commission stated that freebies and discounts for traditional news reporters are "reasonably expected by the audience," while such benefits for bloggers, Twitterers and other social media are not.  I've criticized this position in prior posts.

The question is whether the Commission will take a similar approach in revising "Dot Com Disclosures." If, as the FTC stated in 2000, "fraud and deception are unlawful no matter what the medium," then the Commission's rules regarding fraudulent and deceptive advertising should apply equally to all types of media organizations, online and off.

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