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Jeff Jarvis and Matt Cutts on the New FTC Blog Regulations

As has been anticipated for a while–and discussed during the Ethics of Blogging panel–the United States Federal Trade Commission (FTC) has published explicit guidelines regarding how bloggers (at least within its jurisdiction) must disclose any “material connections” they have to the companies they endorse.  The full details are available here.

There have been a number of reactions across the blogosphere, but I’d like to hone in on two opposing views: those of What Would Google Do author (and blogger) Jeff Jarvis and Googler Matt Cutts.

Jarvis describes the regulations as “a monument to unintended consequence, hidden dangers, and dangerous assumptions…the greatest myth embedded within the FTC’s rules [is] that the government can and should sanitize the internet for our protection.”

Commenting on Jarvis’s post, Cutts replies:

As a Google engineer who has seen the damage done by fake blogs, sock puppets, and endless scams on the internet, I’m happy to take the opposite position: I think the FTC guidelines will make the web more useful and more trustworthy for consumers. Consumers don’t want to be shilled and they don’t want payola; they want a web that they can trust. The FTC guidelines just say that material connections should be disclosed. From having dealt with these issues over several years, I believe that will be a good thing for the web.

It’s a fascinating debate, and I can see merit in both sides. Like the folks at Reason, I lean libertarian (at least on issues of freedom of expression) and am not eager to see more government regulation of online speech. That said, I see the value of laws requiring truth in advertising, and I don’t see why pay-for-play bloggers should get a free pass if they are acting as advertisers. Interestingly, Jarvis’s response to Cutts is: “I trust you to regulate spam more than the FTC. You are better at it and have more impact.” That’s probably true today, but wouldn’t want to invest that responsibility in a company that makes 99% of its revenue from advertising.

Everyone in this discussion sees the value of transparency–the question is whether it should be a legal norm enforced through FTC regulation or a social norm enforced by the marketplace. Despite my general skepticism about regulation of expression, I temper my libertarianism with a dose of pragmatism. For example, I’m glad that the Food and Drug Administration (FDA) at least tries to regulate health claims–its efforts may not eliminate quackery, but they surely reduce the problem.

Do we need FTC regulation in order to tame the jungle of social media? For that matter, will regulations have a positive effect, or will sploggers and other scammers simply ignore them–and perhaps even more offshore? I share Jarvis’s fear that the regulation will cause more harm than good–perhaps even having chilling effects on would-be bloggers. Certainly the FTC will have to use its new power wisely–both to avoid trampling the existing blogosphere and to not scare off newcomers. Still, if the FTC shows that it is only out to get true scammers, it may help establish, in Cutts’s words, a web we can trust.

I’m Daniel Tunkelang, and I endorse this blog post.

By Daniel Tunkelang

High-Class Consultant.

25 replies on “Jeff Jarvis and Matt Cutts on the New FTC Blog Regulations”

I share your ambivalence, but tend to think that a) The FTC should save it pennies, b) they aren’t going to be able to do the job well enough to make it worth doing, and c) it sets up a slippery slope none of us wants to slide down.

I am Gene Golovchinsky and I paid myself to say this.

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As I said in my post over at The Inquisitr I thought Matt’s slough off answer was facietous at best and misdirection at its worst. http://www.inquisitr.com/40884/the-ftc-brings-out-the-nut-crackers-and-centers-out-bloggers/)

No degree of FTC intervention is going to make any difference to splogs or other such garbage and did nothing to directly answer to the fact that new media – bloggers – are being unfairly castigated for doing exactly what has been done for as long as people have tried to influence the press.

If the FTC thinks that this is a problem then why are not those in traditional media having to play by the same rules and don’t give me the crap that they are self regulating. I’ve seen bloggers being far more forth coming over disclosing things that some of the big tech writers – or at least until they were forced to .. and yes I am pointing to Pogue and Mossberg among others.

This is a crap move by the FTC that leaves way too many questions unanswered some of which I ask in my post.

I and Steven “Cranky Old Fart” Hodson and the FTC can kiss my ass.

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Steven, my comment was not meant as facetious and I’d be happy to respond to a couple points.

“No degree of FTC intervention is going to make any difference to splogs or other such garbage…”

At a respected search conference last year, I sat in the audience and watched a presenter recommend “sock puppet” marketing by coming up with fake personas to promote products. With this new guidance from the FTC (plus similar recent guidance in the UK/EU against sock puppet marketing), that sort of bad advice will be much less likely to appear at search conferences. That’s one easy counter-example.

“If the FTC thinks that this is a problem then why are not those in traditional media having to play by the same rules”

The same rules do apply to traditional media, and that’s how traditional media interpreted the updated guidelines. For example, the WSJ said “The [FTC] move is an effort to apply the same rules that already cover broadcast stations, newspapers and magazines to the Wild West marketplace of the World Wide Web.”

Both David Pogue, Walt Mossberg, plus many other big tech writers such as Kara Swisher seem to have very clear disclosure statements, at least when I checked them out.

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I suspect that most good bloggers won’t have anything material to disclose, and that those bloggers most targeted by this regulation will be the most likely to ignore it. If the FTC restricts its enforcement efforts to egregious cases of payola, I don’t foresee any harm. Conversely, if the FTC acts as a petty tyrant and goes after bloggers who embrace the spirit of transparency but don’t satisfy the precise guidelines, then the FTC will earn the enmity of the blogosphere. I’m cautiously optimistic that the FTC has good intentions, even as I’m wary of how power corrupts bureaucrats.

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The quote that I saw from Richard Cleland at the FTC said “Right now we’re trying to focus on education.” I do think it’s good to have these guidelines on the books in case of egregious cases of payola though.

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@Matt RE: 2 .. I don’t disagree that there aren’t smucks in the marketing field but how the threat of fining small time bloggers because they might not post a disclosure id bold enough print isn’t going to solve that problem.

If there is FTC governance over traditional media it sure isn’t widely known – rather they brag about self-governance as being their guiding light. At least tis is what I have read when this subject has come up before so if self-governance is good enough for the news industry why is the FTC centering out small time bloggers with threats of fines that could send any of them to the poor house because we all know us small timers don’t make a fortune from AdSense 🙂

I really appreciate your input here Matt and I am not saying that I am right but I still do not believe that centering out small to mid-level bloggers who are generally pretty smart and have enough ethics to make their own disclosures.

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Matt – Yes, some of the traditional media does choose to disclose, but not all of them. Do you see disclosures on every book review? On every movie review? No, you don’t. Yes, it is well known all of that is done for free (i.e. giving a copy of the book, being let into the movie), but no disclosure is required. Under these FTC rules for bloggers, I would have to add a disclosure for those very same circumstances.

It is delusional to think that the sploggers and poor marketers won’t find ways around these rules (move their blogs off shore, use foreign writers), while some college kid who got lucky enough to get an advance review copy of something is going to end up staring down the barrel of the FTC’s fine gun.

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@Matt – let me start by saying that I like AllThingsD, Kara and Walt. They’ve been real good to us over at SiliconANGLE, and I enjoy their take on things in general. They’re wise pundits and are enjoyable to read.

I’m almost certain… no make that completely certain… that their “extensive disclosure statements don’t say anything about which gadget posts are made with review units, gifts or otherwise equipment that they do not own.

Period.

Do I still trust Walt? Yes. Walt is a solid reviewer and has established his reputation throughout the years.

Steven’s right – traditional journalists, news organisations, and Old Media in general are not held to the same standards these guidelines hold bloggers to.

You talk about “sock puppet marketing…” Was that in regard to blogging or appearing on forums?

These are two very different things. The FTC is specifically going after bloggers and content originators, not folks who’d stuff a comments section or forum full of astroturfed commentary.

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@Daniel the problem – or at least part of the problem I am having with all this is that we are suppose to be building a new media world where to things are equally important:

1. Trust
2. the faith to believe that any conversations being held – whether through normal post -> conversation and sponsored/promoted posts -> are being held with some sense of transparency and honest.

We attempt to place trust in those that we have come to respect that they won’t steer us wrong in their thoughts and opinions whether it be a idea, product or service. We are also lead to believe that we are placing such a high value on “trust” that the moment it is broken any damage done is far worse than any heavy handed fine the FTC may decide to impose.

In either case I would suggest that the new media world build on trust and transparency is far more reliable than any medium governed by ‘suspect’ FTC guidelines.

As I said in the podcast earlier with Mark and Sean I have to seriously wonder what has prompted this sudden concern over the rights and wrongs of blogging to the point that the FTC has become involved. Simple question is – who benefits by smearing blogging even with the idea that it above traditional media needs any kind of governance.

After all new media has been doing quite fine for the last five or so years .. and even before that the FTC didn’t seem to feel the need to step in for Web 1.0

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Ah, yet another sheep who thinks government will make everything better.

“Save me oh mighty government, I’m not smart enough to parse what I read and make my own decisions about what I see on the Internet! Please protect me from my ignorant self! Those evil bloggers should be punished for getting free stuff, because if they get free stuff and then build lies around it, what do? Besides, we all know that if somebody lies on the Internet, the terrorists win!”

Isn’t it neat how the DMV sucks (it does), FEMA sucks, (it does) and to some, even the CIA sucks (debatable), but the FTC, that’s just fine.

Here’s a question. I just received a a copy of a documentary, free of charge. The film in question covers the American missile defense system. I’ll blog about it, but I may not “fully disclose. My dealings are *my dealings* and are the business of no other party.

However, that not withstanding, if I don’t disclose, how would the government look if it prosecuted me for promoting missile defense? (Which happens to be part of the “common defense”, and “providing for the common defense” is one of the opening provisions of the UNITED STATES CONSTITUTION.)

Would Matt Cutts agree with such a prosecution then? If not, is he then merely giving me a pass because this particular instance denotes a specific importance of government?

It’s a catch 22 I don’t think he can answer. 🙂

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Steven, I agree with trust being the coin of the realm for reputable publishers of all stripes. Indeed, I assume that most reputable bloggers will not do anything differently because of the FTC regulations. A few might have to make their disclosures more explicit, but I don’t think the FTC is out to slap the equivalent of surgeon general warnings on every blog post. Still, the whole approach hits a libertarian nerve.

As to whether blogs are being singled out (compared to, say, newspapers), I thought–like Matt–that the rules applied to publishing in general, and that this was simply an attempt to level the playing field. Publishing is publishing: even today, I’d be hard-pressed to draw a sharp distinction between an online newspaper / magazine and a blog.

Art: I get the libertarian party line, and I often follow it. But I’m not so sure about your examples. In particular, as badly as the DMV may suck, would you prefer that anyone who can procure a car be allowed to drive it on the open road? Maybe information accountability isn’t as important as safe roads–after all, the information superhighway is only a metaphor. In general, I’d be more sympathetic to an absolutist free speech position if we did a better job training people to think and read critically.

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@Daniel

One problem…the roads are nowhere close to safe. Have you looked around while driving lately? Holy crap.

Good thing we’ve got those licenses.

Also, one in seven are driving uninsured (one in four in California).

Laws…fascinating.

🙂

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Steven (in response to your post), if the rules single out bloggers and give traditional media a free pass, then I’m with you 100% on the unfairness. Just to clarify: are you saying that the rules are different, or that the enforcement is selective?

Dave, not saying that government or laws ever work perfectly. Still, I prefer an imperfect rule of law to an anarchic or Hobbesian alternative.

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@Daniel: It is that there are no regulations for traditional media not published in digital reverse chronological format (i.e., blog), and the guidelines and Cleland quotes specifically state that they’re after indies, not organizations.

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Daniel .. nowhere that I have read so far gives any indications that the “traditional” media has any FTC guidelines. They avoided this by claiming to self-regulate themselves when it comes to the same disclosures that the FTC is threatening to fine independent bloggers over.

I have have spent the better part of today researching this and the only FTC ‘guidelines’ are geared strictly towards the advertisers promising pots at the end of rainbows. Even the “Statement of Ethics” that people like Walt Mossberg and other “paid reviewers” like him are voluntary and generally because of a more knowledgeable readership asking the right questions.

So if self regulation is okay for the Mossberg’s of the world why are independent bloggers being all painted with the National Enquirer paintbrush?

For the FTC to suggest that this type of potential misleading of readers is strictly in the domain of of independent bloggers is bullshit. As Sean pointed out above name me a newspaper movie reviewer or restaurant critic or automotive writer who discloses all the perks they get because of their jobs.

If the FTC is going to apply these kind of guidelines and fines to independent bloggers then the same should apply to all media. However that will never happen because the independent bloggers are easy targets without any lobbying voice. If the FTC tried to force these guidelines onto traditional media, and even the new media big blog networks you can be sure that all hell would break loose.

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Mark: I thought Matt and others were arguing that, while the new rules may specifically apply to social media, their net effect levels the playing field so that they’re treated just like traditional media. My mixed feelings apply generally to what standard of transparency should be legislated in media. But I have no ambivalence about whether there should be a level playing field for all publishing genres–that’s a no-brainer.

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[…] On the flipside of all this, there are a number of arguments coming from commenter’s who believe this to be a good thing.  In particular, these new regulations will increase transparency and make the purely paid, astroturfed bloggers clearer for more Internet users.  Matt Cutts, a Google engineer who developed anti spam software and the SafeSearch feature, commented on Jeff Jarvis’ blog stating that: […]

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[…] Some in the blogosphere have rallied that the Federal Trade Commission is violating free speech rights in regulations governing endorsements and testimonials on the internet. Sure, there always is a valid issue when an official agency essentially limits your ability to speak freely… but when it comes to blogging in 2010, shouldn’t we applaud the crackdown on those who can make our entire livelihood perceived as distrustful to the general public? […]

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