The Federal Trade Commission published controversial guidelines for bloggers and Facebook and Twitter users, but they are largely unenforceable.
The FTC's rules are an encroachment on free speech, absurd in parts and far reaching. On the surface, the FTC's laws boil down to disclosure:
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.
Taken to an extreme the FTC could kill word of mouth. The FTC's regulations outline all the examples beginning on page 55.
The rub: The FTC doesn't have the resources to track down wayward bloggers taking payola for a plug. Does the FTC have the resources to track thousands of blogs, infomercials and commercials? Nope. How do we know? The FTC says so.
CNet News' Caroline McCarthy quotes Richard Cleland, associate director for the FTC's advertising division:
"As a practical matter, we don't have the resources to look at 500,000 blogs," Cleland said. "We don't even have the resources to monitor a thousand blogs. And if somebody reports violations then we might look at individual cases, but in the bigger picture, we think that we have a reason to believe that if bloggers understand the circumstances under which a disclosure should be made, that they'll be able to make the disclosure. Right now we're trying to focus on education."
The key words there are "if somebody reports violations." Simply put, the FTC's enforcement scheme will like the one deployed by the Federal Communications Commission. The FCC doesn't crack down on obscene speech on TV or radio unless somebody complains and now the FTC will do the same. That's a recipe for disaster on the Web.