New FTC guidelines may affect electronic journalists

The Federal Trade Commission approved on Monday final revisions to new guidelines that will require manufacturers and bloggers who work for them to disclose the exchange of free merchandise.

The guidelines are meant to apply to those who are paid to promote products, not those who are engaged in journalism, but drawing a line between the two is often difficult, and ultimately will have to be decided by courts if the FTC chooses to prosecute a blogger who is engaged in journalism.

The revisions, which are not a law but rather the FTC’s interpretation of existing law in light of new technology, mark the first time the commission has updated its guidelines since 1980.

The revisions included sweeping changes that seek to make the relationship between bloggers and manufacturers more transparent. Bloggers who receive free merchandise must now disclose it on their blog; manufacturers who distribute free merchandise have the duty to inform bloggers they must disclose it.

Thought the commission’s guidelines carefully distinguished between new media and traditional media, legal experts say in practice it may be difficult to apply the rules to an evolving profession.

“The nature of journalism is in transition because of changes in technology,” said Bob Corn-Revere of Davis Wright Tremaine LLP. That is “one of the reason why it pays for a federal agency to exercise caution before inserting itself into this changing environment.”

The commission rejected arguments that it was premature to apply the guidelines to new media, lest advertisers be deterred from using the new medium. It also refused the use of larger, clearer disclaimers, noting these would not be effective.

“The comments correctly point out that the recent development of a variety of consumer-generated media poses new questions about how to distinguish between communications that are considered ‘endorsements’ within the meaning of the Guide and those that are not.”  The FTC’s guide stated. “The Commission disagrees, however, with those who suggest that there is not yet an adequate basis to provide guidance in this area.”

The commission reassured readers that when considering the new media, it would review facts on a case-by-case basis, as it does with all advertising. Further, it noted that such guidelines could help bloggers maintain consumers’ trust by upholding a reputation as a credible, reliable source of information. Regulation, the commission reasoned in the report, “would have a beneficial, not detrimental, effect.”

An example given by the commission was a blogger who frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group. In this scenario, the blogger’s statements will likely be deemed “endorsements.”

Despite the sweeping changes for bloggers, the commission stated that under usual circumstances, it does not consider reviews published in traditional media (i.e. “where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews”) to be sponsored advertisements.

The commission found such reviews not to be endorsements because “knowing whether the media entity that published the review paid for the item in question would not affect the weight consumers give to the reviewer’s statements.” But it did note that this presumption could change if the reviewer received a direct benefit from the manufacturer.

Corn-Revere said whether a regulatory body should issue new media guidelines for traditional journalists — 70 percent reported using social networks and blogs to assist in reporting according to a September report in Journalistics — or whether the profession should devise its own was tricky to navigate.

“In the world of journalism, most everybody would agree that it’s a good thing for publications of whatever type to enforce its own rule of ethics,” said Corn-Revere.  “But whether or not the government should impose it on them is another thing.”