Monday, 21 December 2009

FTC Guidelines: F* This Crap?

From December 1st, FTC (US Federal Trade Commission) guidelines have been put in place. The reaction amongst bloggers and YouTubers in our beauty community has been that of panic, usually disguised as flippancy. Let me first preface this by saying that the UK has one of the most stringent legal systems when it comes to business online. Most of its laws and regulations are similar to those in Europe, but in contrast, the US the rules were very much dependent on the state you happen to be in. Therefore the FTC is arguably applying a level playing field. Many of the FTC guidelines are already Law for UK and Europe based bloggers who fall foul of the disclosures required. But the waters are muddy and moreover Guidelines are not Law: This is acknowledged by the FTC...

"The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act."

In addition, the outrage and confusion of bloggers, particularly those who felt the new strictures and penalties violated their right to the sacred First Amendment, have provoked this soothing assurance from the FTC:

"Where we have brought cases, there are other issues involved, not only failing to disclose a material connection but also making other misrepresentations about a product, a serious product like a health product or something like that. We have brought those cases but not against the consumer endorser, we have brought those cases against the advertiser that was behind it. If people think that the FTC is going to issue them a citation for $11,000 because they failed to disclose that they got a free box of Pampers, that's not true. That's not going to happen today, not ever."

In addition, Richard Cleland (assistant director, division of advertising practices at the FTC) addressed individual blogger concerns and reiterated this point:

"That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That's the thing I don't think people need to be concerned about. There's no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We're focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they're saying is true?"

So, the widely reported instant $11,000 is inaccurate, and moreover the onus is on the word of mouth marketeer or advertiser. Now, I have often thought that bloggers accepting money for promoting a brand is in many ways less unethical than those brands getting free publicity, but this FTC rule seems rather patronising to bloggers. Wheras an old media publication can review a free book (for instance) with no risk of breaking the rules, the same does not apply to blogs. This seems incredibly arbitrary. If I print out my blog articles and hand them out for free as a newspaper, suddenly a different set of rules apply:

"The Commission 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."

If my day job is as a journalist for print media, is my blog independent, or is it addressed as within my capacity as a "traditional media" employee, is it me held liable, or my employer vicariously liable? In any event, how will bloggers' lapses be monitored?? Will FTC employ people, at the public's expense, to police the myriad of blogs out there - or will snitches and rivals use the muddy rules to threaten the competition? Well, the latter apparently: "Competitors are very quick to turn people in. I've never suffered from a shortage of competitive complaints."

This seems a recipe for disaster. It is not newsworthy to suggest that there is a lot of victimisation and vindictiveness around as it is, without giving people scope for serious dobbing in and invoking a penalty.

Now onto the fraught issue of whether a blog is akin to journalism, or a personal conversation. i.e Should government interference be viewed as justified to protect an innocent consumer, as the FTC maintains, from being tricked into purchases; or should a blog be allowed to maintain its image of being independent and indeed the very embodiment of free speech? A comment on an article made me laugh... "Government interaction is always the best answer. Just look at communist China - the people love it over there. They don't have to worry about that silly 'freedom of speech' stuff." It does rather beg the question, how long before the internet and its content is policed... recent issues such as illegal file sharing and downloading have also been presented as a threat to us as users and terrorism laws can be twisted to suit allegations of suspect community forums; IP addresses could well in future be replaced by an internet passport, with all our ID viewable to the government and the nanny state controlling our every move. But wait, this isn't the Daily Mail. Nevertheless, the point is: from being a soft touch, there is now a reversal. Companies who once took advantage of essentially free publicity will now have to ask themselves, whether the blogger can bring a profit greater than the potential thousands of dollars fine to the company. Very few of us can do that. They take the risk:

"The Commission recognizes that because the advertiser does not disseminate the endorsements made using these new consumer-generated media, it does not have complete control over the contents of those statements. Nonetheless, if the advertiser initiated the process that led to these endorsements being made – e.g., by providing products to well-known bloggers or to endorsers enrolled in word of mouth marketing programs – it potentially is liable for misleading statements made by those consumers."

But wait, what is an endorsement?? What if a blogger confines herself to stating demonstrably proven facts? Does the FTC consider that an endorsement? What if one confines oneself to stating such facts and includes links to an ecommerce site? Has the writing somehow been transformed from a statement of fact to an endorsement? And what if I describe a product I genuinely love and recommend, and have google automated ads on my blog, which are prompted by the article, and thus I make money from my recommendation? This point amongst others was eloquently made here:

"I have been writing nice things about my treatment at Sloan Kettering. This has caused ads to come up on my blog, via Google, from the hospital. Presuming someone clicked on them, I’ve made money from the hospital. Does that taint what I say or me if I don’t disclose the payment? That’s the level of absurdity this can reach."

In fact, where to draw the line - what if a product was received as a gift from granny, or you're a millionaire who buys YSL everyday just for something to do, of course your review will be inflected by your situation. There seems a deep suspicion of the government's need to intercept and determine when a disclaimer must be made. Do the FTC just want to control advertising and shut up any mouthpiece other than their own controlled and approved (ahem, $$$$) outlets?

However I have seen increasingly, many popular bloggers have irritated me with their high blown opinion of themselves. They address companies with the assumption that their word can make or break the product on a global scale. It really does make me think, "It's only a blog/ It's only YouTube!" However popular it gets, surely it still is small fry? But perhaps it can compete, as I have said before, the blogs and videos do cut straight to the core of makeup enthusiasts. Seen in this light, maybe the time was ripe for FTC intervention?

Ultimately, here in the UK there are laws in place which will protect consumers from deliberate scams and astroturfing, but on the level of reading blog and YouTube reviews, it ought to be merely regulated by the individual's own conscience, and taken with the viewer/ reader's own judgment. People who abuse the trust instilled within them will hopefully become a victim of their own destruction. I recently got an email from a company which was so clearly a cut and paste job (Dear... [space] oogle makeup .... etc) and what with my bad experience with a ruthless word of mouth company I value my blog and individuality more than I value the novelty of a freebie. (Chanel, if you are listening, I don't mean that really, haha) but by the same token there is clearly no harm in accepting and reviewing a freebie that genuinely is of interest to you and your readers. It can even be the veritable lifeblood of your blog, and to great acclaim.

"And there is the greatest myth embedded within the FTC’s rules: that the government can and should sanitize the internet for our protection. The internet is the world and the world is messy and I don’t want anyone – not the government, not a newspaper editor – to clean it up for me, for I fear what will go out in the garbage: namely, my rights. "


  1. Ah, great post as always, Gail. With this much talked-about new FTC rules, I do feel that it takes some fun out of blogging. Do we now always have to look behind our shoulders? Better to err on the side of caution with everything we say?

    It's always been my normal style to incorporate in my posts/story how I came to own/buy a product, so I guess, given the present situation, that suffices. A whole paragraph of legal-sounding disclaimers placed at the end of posts, while necessary, looks so out of place in a blog. But who knows.....I might have to bow to that one day too.

  2. I wouldn't worry too much about the FTC. They have limited resources and from what I've seen, they tend to use them to go after the biggest scammers. People have been reporting e-mail spammers to them for years and I don't see much change in that industry. :)

    I'm no expert, but I would guess if people post honest reviews (including good reviews) and state whether they received the product for free, then they are probably fine.

  3. As usual a well written and eloquent piece! You must have spent SOOO long researching this! Very thought provoking too!

  4. great piece....very interesting and clarifying at the same time! bbbx

  5. @Witoxicity
    Agreed, and I am sure your blog style is the ideal approach anyway, I wish all blogs were as consistently measured and informative!! Keep it up xxxx

    @Ms M
    Yes, exactly right! Thanks xxxx

    haha you are so right, it bloody did! Felt upset to think no one but me would enjoy it though. I loved researching it actually! This is my favourite post so far xxxx Thanks!

    Oh thank you so much! xxxx