“Where did you get that keychain?”

by Walter Olson on October 19, 2009

[Bumped Monday a.m. with added links for readers who missed it on Friday]

My new article on the Federal Trade Commission’s very bad new rules on endorsements and social media is now up at City Journal.

Meanwhile, on Wednesday, the FTC held a conference call for reporters to dismiss concerns as unfounded. “They are not rules and regulations, and they don’t have the force of law,” said Mary Engle, associate director for advertising practices at the FTC’s Bureau of Consumer Protection — which may be narrowly true but is hollow reassurance at best, since the guidelines plainly are meant to signal where the commission intends to aim its future enforcement efforts, and since not all bloggers will be willing to defy the guidelines on the assumption that courts will refuse to go along with the FTC’s interpretations.

“We are not going to be patrolling the blogosphere,” Engle also claimed. “We are not planning on investigating individual bloggers.” And: “We’re not interested in playing gotcha in the gray areas.” And yet the guidelines are again and again written in such a way as to reserve the Commission’s discretion to do any and all of these things. Ann Althouse, as before, is rightly scornful:

Oh, good. You’re not planning…

I’m so relieved.

“We’re not interested in playing gotcha in the gray areas.”

Not yet. But once the law is on the books, will you never feel tempted? Nothing will motivate you to venture into the gray?

Of course the FTC, like other regulatory agencies, is frequently drawn into enforcement not because it has been patrolling some area as such, but because some interested party (a competitor, a disgruntled employee, an ideological critic, a litigation opponent) calls the attention of enforcement staff (or the press) to the purported violation. Is the FTC really saying, “Yes, we’ve declared blogging in such-and-such a manner to be illegal, but we’re planning to look the other way?”

More on the rules: New York Times (reactions in world of online fashion journalism); Dear Author (new rules “will be rife with abuse and misuse and uneven application”); David Johnson/Digital Media Lawyer; BNA TechLaw (endorsing agency reassurances); Robert Siegel, Mind Your Own Damn Business Politics (guidelines “might bite traditional media after all”).

P.S. Randall Rothenberg of the Interactive Advertising Bureau, a trade group, notes that in recent days “the FTC has been furiously backtracking about their implications, in an apparent attempt to soothe the blogosphere”, but calls the reassurances “disingenuous”. More: PaidContent.org (IAB considers the rules constitutionally dubious under First Amendment); Ars Technica. And some more new links:

  • According to one report from a children’s literature conference, the FTC’s Engle says Amazon bookstore arrangements must be re-disclosed anew with each linked post, but — in a seeming departure from what colleague Cleland said a week ago — otherwise “independent” book reviewers need not disclose free review copies [A Chair, a Fireplace, and a Tea Cozy]
  • Gordon Crovitz in Monday’s WSJ (FTC backtracking in face of reaction; “Do employees of a company have to disclose the fact of their employment every time they comment on its products through their personal Facebook accounts?”)

{ 2 trackbacks }

Kayak2U Blog » Blog Archive » “the show that never ends”
10.16.09 at 11:19 pm
Shopfloor » Blog Archive » How Do These FTC Regs Encourage Jobs, Economic Growth?
10.20.09 at 8:29 am

{ 8 comments }

1 Jane 10.16.09 at 6:26 pm

What was the f’ing point of extending the language to cover bloggers if FTC had no intention of targeting bloggers. It would have been simple to phrase the revisions to include liability only for the advertisers if that was the goal.

2 Jim Collins 10.17.09 at 9:35 am

Intent means nothing. It is the written law or regulattion and how it can be interpreted. That is why the Health Reform debate is so scary. It isn’t what they intend, it is how the law is written. This is why I can’t see politicians passing legislation that they haven’t read or they don’t understand.

3 William Nuesslein 10.18.09 at 10:54 am

Jim,

Reading bills is a catchy slogan that misses the point. Understanding the dynamics of legislation goes way beyond reading. CPSIA wonderfully will reduce lead exposure to children. Senator Murray is proud of her efforts to protect children. The problem is that incidental use of lead harms nobody. The case of the child in Minnesota smells to high heavens.

I doubt if Mrs Murray can actually understand that CPSIA has no benefit at great cost. If the legislation prohibited travel on Boeing Airplanes, her opinion might have been more rational.

4 Roy B 10.19.09 at 9:59 am

Why are they wasting our time? They say these are not rules and they have no force in law, furthermore they will not be enforcing them. So why were they written? Sounds like staff have nothing to do…

5 A.W. 10.19.09 at 10:10 am

Well, that reminds me of when I worked for a while in the Federal Public Defender’s office. Down there the bane of that office is 18 USC 1326, if remember the cite right, unlawful entry into the United States. Basically if we throw you out of the country and you come back, you are in a heap of trouble. Especially if you are what is known as an aggravated felon, because then they can put you away up to 20 years.

Now look, I really want to see our immigration laws enforced. But 20 years? Seems a bit harsh to me. And if you look into what counts as aggravated felony, the courts have gotten a bit too creative in that regard, covering activities that most wouldn’t consider to be violent crimes (the definition requires the crime to be either violent or drug related). Like car theft.

Anyway, so I did some research and if you go back and look into the history of that law it is clear that the real purpose of the law was to get at the drug kingpins. Basically they knew a lot of kingpins were illegal immigrants too and just as al capone was grabbed for tax evasion instead of being a gangster, they hoped United States Attorneys would grab these drug kingpins using this law. They didn’t expect it to be against some poor schmuck who got in barfight and pled guilty to assault, failing to understand that it could cause him to be thrown from the country.

But guess who they usually enforce the rule against? The drug kingpin who can afford the fancy lawyers? Or the poor immigrants who can only get the public defenders?

So that makes me pretty leery of granting too much prosecutorial discretion. And when we are talking about speech, the case law says that overbreadth is specifically a problem. the chilling effect you are reporting is a problem.

6 Craig 10.19.09 at 11:32 am

Are we going to get a disclaimer about product placement in movies (superman drinking a Coke)? How about the way magazines place ads in their magazine? Or that magazines that accept tobacco ads rarely run news items warning of smoking risks? Or all the freebies that reporters get? Or publicity stunts?

7 A.W. 10.19.09 at 1:21 pm

Hey on a divergent point, can we use this law to get the baloon boy’s parents in even deeper trouble. i mean let’s find some good in all of this.

8 John Burgess 10.19.09 at 7:51 pm

Craig: Reporters don’t get (or get to keep) freebies anymore. It’s been well over ten years since they could even have someone buy them lunch. At least at the major papers, taking a freebie is a firing offense, first time, no questions asked.

It may be different for TV, particularly cable TV, but I sincerely doubt it.

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