FTC Guidelines for Ads Now Apply to Social Media

Today the Federal Trade Commission published final revisions for its Guides Concerning the Use of Endorsements and Testimonials in Advertising [81 page pdf], which now explicitly includes bloggers and other forms of “new media.”

Based on comments submitted to the FTC when it published the Guides revisions as a proposal:

[T]he Commission is setting forth a construct for analyzing whether or not consumer-generated content falls within the definition of an endorsement in Section 255.0(b) of the Guides. The Commission will, of course, consider each use of these new media on a case-by-case basis for purposes of law enforcement, as it does with all advertising.

That construct focuses on this fundamental question:

[I]n disseminating positive statements about a product or service, is the speaker: (1) acting solely independently, in which case there is no endorsement, or (2) acting on behalf of the advertiser or its agent, such that the speaker’s statement is an “endorsement” that is part of an overall marketing campaign?

The specific set of facts that the FTC will examine when considering enforcement actions include:

whether the speaker is compensated by the advertiser
or its agent; whether the product or service in question was provided for free by the advertiser; the terms of any agreement; the length of the relationship; the previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and the value of the items or services received.

This certainly suggests that bloggers and other social media users who are given free products to review must disclose that the products have been provided to them for free.

While it seems unlikely that items of de minimus value, such as a coupon for an ordinary sized food product, would be the target of an enforcement action, it is also clear that the FTC will look at the totality of the circumstances and the specific facts of any complaint.

Because of that fact-based analysis, a blogger writing once about how much she enjoyed the free sample food products made available at a conference would be in a different situation under this analysis than a food blogger writing regularly about a variety of products provided by a single manufacturer, because of the greater “likelihood of future receipt of such products” even though the value of the products might be the same fairly low dollar figure.

However, even that is uncertain. In footnote #21 within the Guides, the FTC almost seems to simultaneously say that a one-off recommendation, published on a personal blog, of a product provided as a freebie, is not a sponsored advertising message, and that it could be “essentially” sponsored by the advertiser.

Later commentary suggests that larger blogs, blogs with high readerships in a demographic of interest to the product provider, and bloggers who participate in word-of-mouth marketing programs are most likely to be considered as having “sponsored” content and the need to disclose such relationships. The FTC also notably used an example of a parenting blogger who frequently receives games from a toy manufacturer — sending the signal that so-called “mommybloggers” are still on the FTC’s radar on this issue.

Even if you are not a “Mommyblogger,” do not participate in any word-of-mouth-marketing networks, don’t think your blog is read by anyone other than your parents and your best friend, if you get something for free and write about it on your blog, disclose that you got it for free. If someone offers to sponsor your blog, make that fact completely clear and easy to find on the blog.

And do not think that the focus on blogs in the examples mean that this only applies to bloggers. The actual rules use the term “new media” — which is clearly intended to include any form of media that is currently in use or becomes widely used in the indefinite future. Sponsored Tweets and sponsored Facebook activity are clearly on the FTC’s radar.

The key question is how is a blogger, a tweeter, or a user of any other form of social media required to make the disclosure of that sponsorship relationships?

The folks at Blog With Integrity held a webinar on the topic a few weeks ago, which will be made available on their web site. But here is the bottom line: Sponsorship disclosure must be easy to find, easy to read, and easy to understand.

You don’t have to lead with the disclosure, but if the sponsorship is of an individual post or tweet, it should be included within the post or tweet. If it is sponsorship of the blog or your whole Twitter account, it should be visible — including being identifiable and readable — on the landing screen of the account. Being buried in the “About” or “Profile” page is a risky move, and I don’t recommend it.

The City of Bozeman Wants Your Password???

I believe that a lot of bad privacy decisions are made by well-intentioned people who don’t understand either how various technologies work, or who don’t understand the easiest, cheapest, and most effective way to protect people’s privacy is to limit the amount of data they collect and retain.

The City of Bozeman, Montana, appears to be guilty of severe over-collection of information. For those persons who apply for and are conditionally offered jobs involving the public trust by for the City of Bozeman, they are required not to merely provide URLS for blogs and FaceBook or Twitter usernames, but also the passwords associated with those accounts. Here’s an interview with the Bozeman City Attorney Greg Sullivan explaining what they collect, from whom, and why.

The Terms of Service for FaceBook specifically indicates, “You will not solicit login information or access an account belonging to someone else” and “You will not share your password, let anyone else access your account, or do anything else that might jeopardize the security of your account.” Violations of those terms have consequences from FaceBook: “If you violate the letter or spirit of this Statement, or otherwise create possible legal exposure for us, we can stop providing all or part of Facebook to you. We will generally try to notify you, but have no obligation to do so.”

Twitter’s Terms of Service are unsurprisingly similar, noting, “You are responsible for keeping your password secure.” Furthermore, they have more forthright consequences: “Violation of any of these agreements will result in the termination of your Twitter.com account.”

Furthermore, Bozeman’s official practice of collecting job applicant social networking password information also includes the retention of that information. Yes, they take your password and they keep it, in allegedly secure HR files.

As someone who once started a new job in an office that had previously housed HR, and found a stack of 50 forgotten personnel files on my desk, I consider that practice highly suspect at best.

Not only shouldn’t Bozeman collect login information in the first place, but they should certainly not retain it after completing the task for which they allegedly need it.

I do think employers have the right to ask for blog and social networking information about potential employees, and to search for information about potential employees online. Those sites are public or quasi-public, and users need to remember that anything they post online might be seen by anyone — a boss, a parent, a child, or a future potential employer.

That doesn’t mean people shouldn’t use social networking sites or blogs, just that those are public spaces every bit as much as the reception area outside of the interview.

One major risk that has not been explored in the discussion of this policy is Bozeman’s claim that they won’t use any information that they are not legally permitted to use, that they find online — ie race, religion, marital or pregnancy status.

Really?

I have a hard time imagining how that gets enforced.

And what about information someone finds about unprotected or potenially unprotected classes like gays and lesbians? Or single mothers? Or people in recovery from drug or alcohol abuse?

What if the decision-maker is of the opinion that people who enjoy violent video games are prone to violence?

Many thanks to Boing Boing, the Missulian, and others for bringing this to the light of day.