Aug 24, 2011

Ashton Kutcher Gets a Pass; Was the FTC Punk'd?

The New York Times "Bits blog" reports that the Federal Trade Commission has announced -- in a tweet, which is noteworthy in itself -- that it would not be investigating the online issue of Details magazine, guest edited by actor Ashton Kutcher, which profiled a number of tech companies in which Kutcher has investments. (The Times story came after pointed out the breach of journalistic ethics.)

The FTC's announcement came one day after the blog reported that Richard Cleland, assistant director of the comission's division of advertising practices, had said that online magazine could run afoul of the FTC's "Guides Concerning the Use of Endorsements and Testimonials in Advertising."

“If you’re out there promoting individual products that you have a specific investment in, it needs to be disclosed,” the blog reported Cleland as saying. “If you have a significant economic investment that is not otherwise apparent, that may potentially affect the credibility of your endorsement, and I see that as a potential problem.” “It’s certainly a possibility that a case like this could be investigated,” he added.

As I've written before on this blog and elsewhere, the FTC guides require disclosure of compensated endorsements in media where such compensation is not obvious (in the view of the FTC), such as on blogs and other social media.

Since issuing the final guides in late 2009, the commission has taken action in three cases, by reaching settlements with Loft stores, a company selling online guitar lessons and a public relations firm. But it declined to act against various companies' relationships with bloggers, including Google, Absolut vodka, exhibitors at the 2011 North American International Auto Show and a Moroccan hotel.

By announcing its decision not to pursue Kutcher under the Guides via Twitter, with its 140-character limit, the commission's announcement did not provide any details on the decision. And an FTC spokesman did not elaborate in a Times interview, saying only that “Rich Cleland misspoke.”


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