FTC Endorsement Guides Impact Bloggers and Twitterers

Man Controlling Trade, Sculpture Outside FTC

I just gained another new follower on Twitter (IP_Privacy), and when I went to my Twitter account to follow in return I noticed they had tweeted an article from the Washington Post regarding the FTC setting endorsement rules for bloggers.  It seems that the Federal Trade Commission has decided to update the guidelines relating to the use of endorsements and testimonials in advertising.  See FTC Press Release and Guidelines, which go into effect on December 1, 2009.  This has caused a great stir in the blogosphere apparently.  The FTC seems to be trying to update its rules relating to endorsements and testimonials, and they want bloggers to make it clear when they have received cash or products in exchange for writing positive reviews.  I suppose that is appropriate, but unfortunately the Guidelines are not at all narrowly tailored to bring about that sensible change, and are ridiculous and ambiguous to the point where I see very little hope that the government will be able to do anything to enforce them.  I am also always more than a little bit troubled whenever the government does anything to curtail free speech, even if the goals are laudable.  Here while the goals may be laudable, the language of the guidelines does not match up with the stated purpose and are an excellent example of governmental overreaching.

The Guides get off to an inauspicious start when they attempt to define the term “endorsement,” which seems rather fundamental. The term is defined as follows:

[A]n endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.

So, in other words, reality does not matter. What matters is the perception of consumers who may believe that something is an endorsement when in fact it is not an endorsement. So if you express an opinion that consumers might thing is the opinion of an advertiser then that is an endorsement even if the views you express are really your own views. So the FTC can take action against endorsers, bloggers and twitterers for their own opinion and views if consumers might mistakenly believe it to be the view of an advertiser.  How completely absurd!

But wait… there is more… Under the section heading “General Considerations,” which starts to lay out the nebulous specifics, it is says: “Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser.” You have to be kidding me! Does the FTC think they can act as thought police and determine what someone actually believes? Unless they have perfected the Vulcan mind meld I have absolutely no idea how the FTC plans on enforcing this aspect of the Guides.

But wait… there is more… One of the examples under General Considerations, specifically Example 4, is so ridiculous it almost defies logic. It says (emphasis added):

A well-known celebrity appears in an infomercial for an oven roasting bag that purportedly cooks every chicken perfectly in thirty minutes. During the shooting of the infomercial, the celebrity watches five attempts to cook chickens using the bag. In each attempt, the chicken is undercooked after thirty minutes and requires sixty minutes of cooking time. In the commercial, the celebrity places an uncooked chicken in the oven roasting bag and places the bag in one oven. He then takes a chicken roasting bag from a second oven, removes from the bag what appears to be a perfectly cooked chicken, tastes the chicken, and says that if you want perfect chicken every time, in just thirty minutes, this is the product you need. A significant percentage of consumers are likely to believe the celebrity’s statements represent his own views even though he is reading from a script. The celebrity is subject to liability for his statement about the product. The advertiser is also liable for misrepresentations made through the endorsement.

You have got to be kidding me! The United States Federal Government believes that a “significant percentage of consumers” are likely to believe that a celebrity on an infomercial is expressing their own opinions? My goodness — does the FTC really think American consumers are that stupid? There is no way a significant or meaningful percentage of consumers believes that a celebrity on an infomercial is just there because the REALLY believe in the product and have to share that information with the public. Everyone knows that celebrities on infomercials are being paid, don’t they?  Isn’t that part of the gag with respect to Burger King’s Tony Stewart School of Endorsements commercial where Carrot Top is confused by the “endorse what you love” line delivered by Stewart?  What makes the Tony Stewart Polygraph commercial so funny is we all know that celebrities endorse what they are paid to endorse and not what they love, right?

As the United States Supreme Court has recognized with respect to trademark law, there is a tolerance for a certain amount of confusion. See K.P. Permanent Makeup v. Lasting Impression I, Inc. The reality is that the law cannot and should not concern itself with the least common denominator and dumb down discourse so that the most naive among us become the standard used to determine whether there is confusion that should be rectified by litigation or regulation. There will always be some people who are confused, as evidenced by the following:

• In 1999 Gallup found that 18% of adult Americans thought the Sun revolved around the Earth. See New Poll Gauges Americans’ General Knowledge Levels.
• In the aforementioned Gallup poll, only 76% of adult Americans knew the US won its freedom from the British as a result of the Revolutionary War.
• 34% of Americans believe in ghosts, 24% believe in witches and 37% believe in astrology. See 10/28/05 FOX Poll.

According to the Wall Street Journal, the FTC is not going to be going after bloggers or those who Tweet on Twitter. The Journal reports that Mary Engle, the FTC’s associate director for advertising practices explained to reporters via teleconference that the FTC “will be focusing any enforcements on advertisers, not on individual endorsers. We are not planning on investigating individual bloggers.” What a relief! The only trouble is this statement does not jive with the Guides themselves, which specifically allow the FTC to go after individuals. I wonder why the FTC would want to put into the Guides that they have the ability to go after individuals if they don’t plan on using that power? Of course the FTC wants to be able to go after individuals, and maybe they have no present intent to do that, but they have the authority to do just that and it would be naive to believe that this authority was not placed within the Guides so as to authorize personal action against individuals at some time in the future.

Bloggers have been taking the FTC to task, and Dallas Maverick’s owner Mark Cuban even had his own fun on his blog contemplating whether he needed to fill out any disclosure forms for being comped breakfast at IHOP.  The reality is these Guides are unenforceable, they are hopelessly ambiguous and on top of that they are ridiculous…. but wait… there is more… these Guides are also likely unconstitutional, and that last point is the real sticking point for the FTC, particularly given that the Constitution is so much more than a mere agency Guide.