Bloggers Beware: Or The Perils of Giving a Digital Thumbs Up (Or Down, for that matter)

The dawn of "new media," in the FTC's mind perhaps, has made 'endorsers' out of all of us. Social media marketing has empowered individuals to be persuasive and reliable sources of what is good and what is bad out there - and the personal touch is a lot cheaper for advertisers, too.

The US Federal Trade Commission came out with a controversial set of revised rules on product advertising, Concerning the Use of Endorsements and Testimonials in an attempt to regulate social media marketing. The rules will directly affect bloggers and other Internet savvy individuals who use sites like Facebook, twitter and their own review blogs.

The nebulous set of rules have caused an uproar in cyberspace where numerous loopholes and ambiguities in the rules have been pointed out. Anyone who receives products and blogs about them ("endorsement") and keeps the products for himself/herself ("compensation") is required to disclose such fact, lest s/he be investigated and subsequently fined a whopping $11,000 for the failure to disclose such fact. The rules are explicit that it doesn't matter if you give good reviews or not, what matter is that little link you put at the end of your post directing readers to the site where they can purchase the product you praised or trashed (to an extent).

The new rules raise a lot of questions and gives rise to even more absurd scenarios. One is the targeted regulation of social media marketing while steering clear of "institutional" figures such as newspapers, that more or less operate the same way as blogger-endorsers do but are apparently not covered by the FTC regulations.

But individuals who sign up for fan pages on Facebook are suspect. Even those who tweet about a product, offering a quick link to it, must find a way in 140 characters or less to disclose their "material connection" to the advertiser. What about the hundreds of thousands of bloggers out there, with a place in cyberspace but nowhere in the US jurisdiction? Will sites like Blogspot and Wordpress that host their blogs be eventually considered as "institutional figures" (and therefore outside of the regulations) or will they become the next cyberpolice?

Now that I think about it, maybe I should take myself off Steve Jobs' Facebook fan page - the FTC might think I got an iPod out of it.

http://www.edrants.com/interview-with-the-ftcs-richard-cleland/

Jat Tabamo Blog #2