The Federal Trade Commission has published its Final Guide Concerning the Use of Endorsement and Testimonial in Advertising (16 C.F.R. Part 255) (link to notice-www.ftc.gov/opa/2009/10/endortest.shtm). This Guide addresses in detail the use of blogging endorsements for products. Under the new Guide, bloggers will be required to disclose the material connection they share with the seller of a product or services. These guides are not law, but are rather administrative interpretations of law to assist advertisers with compliance with the Federal Trade Commission Act. That being said, Court will certainly consider them as persuasive authority, so businesses need to be aware of them.
The implications from a information technology law or entrepreneurial law perspective is pretty profound. Blogging has always been the last bastion of free speech where anyone can put forward their ideas, impressions, and opinions without reprisal (with the exception of being forced to endure some flaming if your posts are outlandish). This included a wonderful opportunity for word of mouth advertising campaigns, that are really just now starting to come into their own. But now, that freedom is curtailed slightly. It also represents an increasing involvment of the government in the Internet.
Personally, I think this position by the FTC is good. It is important for bloggers to disclose if they are compensated for their opinions and endorsements. Consumers should have full information when making their decisions. The impacts on businesses, however, will be significant. Both businesses that blog themselves and businesses that utilize blogging as an advertising tool will be affected.
One aspect of this Guide that I find most intriguing are statements to the effect that advertisers may be liable for the statements made by paid endorsers on blogs. These statements are related to Commission prosecution of claims, but, from a technology counsel standpoint, these statements could open the door to increased product liability or breach of warranty litigation from on-line statements. Increases in this type of litigation may have impact on court's opinions related to Section 230.
The Guide is now out there with an effective date of December 1, 2009. Be aware and good blogging.
The implications from a information technology law or entrepreneurial law perspective is pretty profound. Blogging has always been the last bastion of free speech where anyone can put forward their ideas, impressions, and opinions without reprisal (with the exception of being forced to endure some flaming if your posts are outlandish). This included a wonderful opportunity for word of mouth advertising campaigns, that are really just now starting to come into their own. But now, that freedom is curtailed slightly. It also represents an increasing involvment of the government in the Internet.
Personally, I think this position by the FTC is good. It is important for bloggers to disclose if they are compensated for their opinions and endorsements. Consumers should have full information when making their decisions. The impacts on businesses, however, will be significant. Both businesses that blog themselves and businesses that utilize blogging as an advertising tool will be affected.
One aspect of this Guide that I find most intriguing are statements to the effect that advertisers may be liable for the statements made by paid endorsers on blogs. These statements are related to Commission prosecution of claims, but, from a technology counsel standpoint, these statements could open the door to increased product liability or breach of warranty litigation from on-line statements. Increases in this type of litigation may have impact on court's opinions related to Section 230.
The Guide is now out there with an effective date of December 1, 2009. Be aware and good blogging.
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