Megan McArdle

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Our Lips Are Sealed

08 Oct 2009 03:46 pm

A reader asks me to blog about the FTC decision on blogger disclosure.  The problem is, it's so transparently stupid that I don't even know what to say.

The only "free gifts" I get from companies are review copies of books, and the occasional soggy vegetarian sandwich at some corporate lunch.  That's because my employer would fire me if I accepted such things, and rightly so.  I'm in the news business.  We don't mix business and advertising.

I didn't as a private citizen, either, but then, it's not like people were knocking down my door trying to give me free stuff.  (What sort of products would a policy blogger endorse?  Stats software?  The Almanac of American Politics?) 

Is it kind of iffy? Sure.  There's a well known literature showing that once you've given people something, they feel obligated to return the favor, even if they didn't really want the thing you gave them.  The effect is presumably stronger if it's something cool that you did want.  And of course, I imagine it's hard not to blog with the thought of all the other goodies you'll be foregoing by giving a product a bad review . . .

But on the scale of cosmic harms, this ranks somewhere around putting an ill-considered steak back in the chicken case.  How can someone who is writing something for free, that those people may or may not consume at will, have a legal obligation to said people?  I can't believe that anyone thought that this required a law, rather than, say, some common sense.  If this is so pressing, where are the sob stories of consumers who bought PDAs and baby buggies that they don't even like?

This is of a parcel with the ongoing regulatory process, whereby every trivial thing that is wrong with the world requires a rule to correct it.  But then, that's what you'd expect me to say.

Update:  More from Walter Olson

Comments (53)

ElectronHayek

This is simply a ploy to shut down all dissent against Obama. Do you think they'll go after Daily Kos or Huffpo? hahahahha

Calvin Jones and the 13th Apostle (Replying to: ElectronHayek)

No it isn't, you idiot. The TradMed is exempt from this(at least for now). So it doesn't stop Faux Noise(or Drudgico) one bit. It purely has to do with Versailles' hatred of the blogs.

ThatPirateGuy

Is it known who was on the committee that dreamed this up? When did deliberations for this decision begin?

Inquiring minds want to know.

On its face the rule seems somewhat sensible, aside from the free speech objections. However, there are two major glaring problems

1. This is not a new law, instead it is a new interpretation of existing law. How can a law be interpreted to mean two opposite things?

2. Why aren't journalists bound by the same restrictions? If a blogger is required to disclose gifts, why would someone who instead prints their blog and distributes it on paper exempt from this requirement?

ThatPirateGuy

I found out. From the PDF these rules were published for public comment in November 2008. Can someone with more understanding of how these things work tell me what level of change the current administration could have applied? When were the outrageous anti-blogger parts added?

I think what they ought to do is exempt sites under a certain amount of traffic. Seriously. If you've got, say, Andrew Sullivan's (or Megan's) traffic, government-imposed disclosure regulation along the lines of what radio or TV stations face seems only fair. But If you've got the kind of traffic I enjoy, that's a waste of time.

Joshua Lyle (Replying to: Jasper)

Radio and broadcast tv are ostensibly using public bandwidth and thus held to higher standards that cable and internet sources, which should be left alone.

Jasper (Replying to: Joshua Lyle)
Radio and broadcast tv are ostensibly using public bandwidth and thus held to higher standards that cable and internet sources, which should be left alone.

Are print vehicles exempt from such regulations, too? Maybe it is the case that broadcasters should be held to a higher standard. But it doesn't necessarily follow that websites should be held to no standard.

This doesn't make my top 100 (nor top ten trillion) list of things to worry about, so I freely admit I've but scanned the odd article and headline about this story. In other words, I'm pretty much talking out of my butt. I had assumed this regulation is simple part and parcel of the rules against false or deceptive advertising. Again, I can't imagine it's worth the government's time to worry about some obscure blogger who gets thrity visitors a month -- and most of those friends and family. But if your daily readership is in the thousands, you're comparable to a decent-sized newspaper. Seems to me basic fairness dictates regulations designed to provide a modicum of protection for consumers against false/deceptive advertising ought to apply to them, too.

Alsadius (Replying to: Jasper)

So does that imply government-mandated hit counters?

blighter (Replying to: Jasper)

How can you complain about lack of traffic and not include a link to your site?

That seems somewhat like complaining about a lack of sex as you avert your eyes from the many coeds sprawled begging at your feet...

Jasper (Replying to: blighter)

If you updated your blog as infrequently as I, you wouldn't be encouraging folks to visit either.

tim maguire (Replying to: Jasper)

Part of what they don't get about the new media (whether blogs of facebook or twitter or any of the others out there) is that it's a self-correcting system not in need of aggressive consumer protection.

Popularity depends on the personal integrity of the poster and the site traffic can drop off a cliff in the blink of an eye if the blogger (booker, twitterer, etc.) starts making claims that aren't true. The pursuit of swag would quickly destroy them.

And there, simple as that the problem is fixed with no need for more bureaucrats or taxes to fund enforcement.

Jasper (Replying to: tim maguire)
Part of what they don't get about the new media (whether blogs of facebook or twitter or any of the others out there) is that it's a self-correcting system not in need of aggressive consumer protection. Popularity depends on the personal integrity of the poster and the site traffic can drop off a cliff in the blink of an eye if the blogger (booker, twitterer, etc.) starts making claims that aren't true. The pursuit of swag would quickly destroy them. And there, simple as that the problem is fixed with no need for more bureaucrats or taxes to fund enforcement.

Again, I acknowledge this isn't some kind of crisis that cries out for a remedy, but still, your claim here seems a bit off. And that's because it might not be possible to find out whether or not a blogger is "making claims that aren't true" if what we're referring to is selling ads/endorsement (ie., accepting compensation in return for marketing hype that's passed off as objective opinion) that aren't disclosed. What if some big traffic blogger goes through, say, a ten year period of time when he gets away with selling hundreds of thousands of dollars worth of "opinions" -- none of it disclosed -- and these opinion prompt millions of purchases on the part of unsuspecting consumers? Yeah, I know your thinking here is "the market will find out" but that's simply not a given. It may take the market years to come to the conlusion that "Blogger XYZ is full of shit."

Seems to be this is a legitimate area for consumer protection, although again, it doesn't extend to a every lightly trafficked blog on the planet.

How about this. The new law states that all people should be aware that the things they read can be biased by outside influences. If a blogger wants to indicate that the opinons he is offering aren't the result of free gifts, then he sho is free to do so. If no disclosure is made, one should assume the author is biased.

Two things.

First, could someone explain this one to me: "putting an ill-considered steak back in the chicken case"

I love archaic or otherwise odd sayings and that's what this sounds like but I have no idea what it refers to, though I get the meaning from context clues. (Thanks fourth grade english class!)

Second, "This is of a parcel with the ongoing regulatory process, whereby every trivial thing that is wrong with the world requires a rule to correct it. But then, that's what you'd expect me to say."

Of course it is. Because the well-funded libertarian lobby keeps sending you free stuff. Time to fess up, it's the law now...

Peter (Replying to: blighter)

Grocery shopping. You pick up a steak, change your mind, and put it in the chicken case, instead of walking back to the steaks.

tim maguire (Replying to: Peter)

Be glad it's going back in a refrigerated compartment. How'd you like the stock boy to find it behind the jellies next Tuesday?

derek (Replying to: blighter)

Is this your George H.W. Bush moment? Never been shopping?

Derek

From the PDF these rules were published for public comment in November 2008. Can someone with more understanding of how these things work tell me what level of change the current administration could have applied?

Relatively little. After comments are received, they have to respond to the comments, including making some changes in response if they like, and explaining both the changes they made and the ones they didn't make. Then they publish the final rule (or, as it appears in this case, a revision or two which accepts further comments). So they can make some changes, but if they make really big ones without re-publishing, they risk a challenge under the APA as giving the public inadequate notice.

I haven't read closely (and I won't), but it looks to me like the blogger provisions have been there from the start.

I should also point out that while in principle Obama could have done something about this, rulemaking is largely the province of the permanent bureaucracy of which the President is merely the titular head. Formally speaking, the Queen of England can dissolve Parliament. Doesn't happen all that often.

doctorpat (Replying to: Rob Lyman)

Happened in 1974. The Australian parliment was dissolved by the Queen's viceroyal representative.

So it isn't off the cards. But hardly common.

Rob Lyman (Replying to: doctorpat)

I thought it was "viceregal," but I confess my knowledge of the pantalooned servants of the English Tyrant is not as complete as it might be.

Alsadius (Replying to: Rob Lyman)

Heck, if you want to be technical, every time an election is called, the Queen(or her representative in the non-UK parts) dissolves Parliament.

Yeah, I know that's not what you meant. Still...

I think (and correct me if I'm wrong) that Sullivan/McArdle/Coates/Fallows/Goldberg are all employees of The Atlantic and that they are posting in their blogs on ...theatlantic.com as employees of The Atlantic (opinions obviously are their own)I think you can say the same for, say, Paul Krugman at the NY Times or Sean Hannity at Fox.

I think what is fair is that somewhere on this site..(and it may be there but I've not looked for it) is what is the gift policy for employees at the Atlantic that Megan et al need to comply with. My employer (a financial service company) does have a gift policy which is in our code of conduct and that code of conduct is available to the public on our website so people know what is expected of us.

So if The Atlantic says Megan can get lavish gifts from 3rd parties so be it but one can assume bias. If the policy says soggy sandwiches only, then that is disclosed.

But then I think the same rules should apply to Andrew and Megan as well as Hannity/Olberman/Krugman

blighter (Replying to: Scott A)

"If the policy says soggy sandwiches only, then that is disclosed."

It would amuse me to no end if the gift policy Megan labors under actually specified the sogginess of free sandwiches.

I think what is fair is that somewhere on this site..(and it may be there but I've not looked for it) is what is the gift policy for employees at the Atlantic that Megan et al need to comply with.

That's all very reasonable. But do you want the FCC to be mandating that policy? Bear in mind when a government bureaucracy starts leaning on you it's likely to cost you a whole lot of money no matter what the outcome. They don't have to be reasonable - they're spending someone else's money.

There's a well known literature showing that once you've given people something, they feel obligated to return the favor, even if they didn't really want the thing you gave them.

I feel a strong obligation to punch people who give me things I don't want. Sadly, due to local ordinances I am rarely able to fulfill my obligations.

Seriously, though, at first I thought requiring some disclosure made sense, say for gifts or etc. of $100 or more, but upon consideration I'm not so sure. Do we have these rules for radio or TV?

blighter (Replying to: TallDave)

"Do we have these rules for radio or TV?"

I don't know but I do know that I, for one, always assume bias on the part of everyone on radio or tv; it's only anonymous folk that I find on the internet who I really trust to be totally impartial and honest.

Does this set a legal precedent that Bloggers now are legally the same as the New York Times when it comes to things like press conferences and other media access?

Calvin Jones and the 13th Apostle (Replying to: doctorpat)

Did you read the FTC thing? They are singling out blogs. The gov't and Versailles hates the Cheetos eatin' kids in their parents basement.

Yes. Of course they hate the media they can't control. What did you expect?

My point is that this then gives courts a precedent to hang a "blogger's right of access" ruling on. Or not. IANAL.

Alsadius (Replying to: doctorpat)

Do newspapers have a legal "right of access"? I thought they were legally considered just private citizens, and all the special rights were just self-accorded and not actually legal. It's not like the Podunk Times can demand a chair in the White House briefing room, after all.

For Pete's sake. Every other dang post on the blogs here at the Atlantic is about how useful blogs are for keeping the MSM accountable. Fair enough; that's a good thing.

But now that blogs are being asked to hold themselves accountable, it's the end of the flippin' world? What exactly is the big deal? You write a review, you disclose if you got something from interested parties that might bias your opinion. That takes, what, one line of text and 30 seconds of typing? People, bloggers- get some perspective.

Ken Magalnik (Replying to: Gingergene)

Which is all well and good, but how come traditional news media doesn't have the same gov't mandated rules?

Sarah Natividad (Replying to: Gingergene)

This is the problem-- we DON'T know if one line of text is what they'll consider adequate, or what they'll consider an endorsement. Maybe it'll be OK to just write "this book (that I got for free) is great." Maybe they'll require you to disclose a complete list of every birthday present you ever got from your friend over your lifetime whenever you have a link to her Etsy shop in the sidebar. Maybe it'll be the first when you agree with the current administration politically, and the second when you don't. (And if you happen to like the current administration, don't forget that the "current administration" changes at least once every eight years, and usually to one you don't like.)

albatross (Replying to: Sarah Natividad)

The real problem is what happens when there are a dozen such rules. Suddenly, any blogger that makes a determined enemy finds himself subject to legal harassment or prosecution for failing to adhere to the 500 pages of regulations to which he is subject.

I don't see how this is even remotely permissible under the First Amendment. There are at least four problems that leap out of the page:

1. It discriminates against media for reasons that have nothing to do with the actual differences between the media;

2. It is a content-based restriction on speech.

3. It has no definite standards to guide administrative discretion, which has been the downfall of countless statutes ever since the 1940s.

4. It is impermissible vague (which is related to, but distinct from, point 3).

Two comments:

I blog in spurts on free software. I have mentioned, discussed, dissed, praised a free software package made available by a corporation. Their business model is based on the idea that feedback, use and indeed enthusiastic endorsement is worth having it available for free.

Dear FTC: I'm guilty as charged, but you will have to invade Canada to get me.

Second, if someone, some corporation is willing to give generous gifts of money or neat stuff, I am open to such things. The more you give me, the more I like your stuff, the more positive the comments will be.

Derek

doctorpat (Replying to: derek)

Me too! Me too!

Will blog and endorse products for money!

Any evil american fascists that want to stop me better prepare an invasion plan first. (Or, admittedly, strongarm our spineless government into introducing matching rules.)

muzzybelly, I'm no 1st amendment expert, but the FTC's defense will be that endorsements "bought" with free stuff are essentially paid ads, and therefore subject to regulation. I don't believe this singles out a particular media source, because paid endorsements on TV are regulated to some extent. At least, the media contracts I've seen (few in number, admittedly) have contained anti-kickback clauses, ostensibly because they are required by some law or rule. Also, this isn't a statute, it's an administrative rule, so your excessive discretion worry isn't applicable. And I don't think you can really say it's vague; it appears to be stuffed full of helpful examples and commentary.

None of which is to say I think it is a good idea.

William H Stoddard (Replying to: Rob Lyman)

So long as print media aren't under the same rules, it amounts to discrimination.

Back when I edited the Libertarian Futurist Society's newsletter, we used to have piles of books come in for review. I did my best to read and review them all, and in the process I read an astonishing amount of bad libertarian fiction. And then I found ways to recycle the books, because shelf space is a scarce good and must be allocated to the most valuable books. I've never heard that book reviewers are required to say "The publisher sent me a review copy" or "I resold my review copy to the used bookstore for $2.50 in purchase credit." Getting the free copy is just a functional necessity of doing the job. It's analogous to having your employer pay your airfare to Amsterdam so you can attend business meetings there.

When the New York Times has to state explicitly whether they got a free copy of a book they reviewed, I'll grant that it's fair to make bloggers do the same.

albatross (Replying to: William H Stoddard)

No, it won't be okay. Big players can almost always comply with complicated regulations more cheaply than small players.

In fact, this is a basic problem with the way our government works. The people who have a voice are the big players, the ones with lobbyists and industry groups and lots of former regulators working for them. The small players have essentially no voice, and so there's no reason not to make rules that screw them over. Indeed, that's sometimes even the intent of the rules.

If blogging becomes something you need a legal staff to do safely, the range of debate and discussion in the world will narrow enormously. There are a lot of people who have a commercial or political interest in that happening.

muzzybelly (Replying to: Rob Lyman)

Excessive discretion applies with no less force in the administrative context than in the statutory context. It doesn't matter whether it is a rule of a law that gives the police chief the right to break up political demonstrations that, in his judgment, are "against the public interest." That power cannot be exercised consistent with the First Amendment.

There is a huge gap between "esesntially" paid ads and actually being paid ads. And speech doesn't become commercial speech just because the government says so.

Ah ha! Yes, it makes so much more sense now. I have, in fact, been shopping and have even reconsidered a steak after putting it in my cart. But being a conscientious person, it would never occur to me to stick it back anywhere but where I got it.

I think that was my mental block. That or I am becoming crazily out of touch in my old age, but my great-grandchildren swear that I'm the hippest person over 30 that they know so I don't think that's it...

msully (Replying to: blighter)

So too conscientious to do it yourself and not judgmental enough to notice when others do it, huh? :-) (The latter is why I knew what she was talking about)

blighter (Replying to: msully)

Honestly, if I took the time to notice every time somebody violated my own unspoken standards of behavior... well, I guess I'd be Larry David. But, really, even on a good day I'm only about half as funny as he is.

I think this is a great idea. I can hardly wait for all the actors/celebrities in tv commercials to announce, "They paid me to say this," after their lines.

Jasper (Replying to: raf)
I think this is a great idea. I can hardly wait for all the actors/celebrities in tv commercials to announce, "They paid me to say this," after their lines.

Television commercials do provide disclosure information if you follow your screen closely, including something about "this is a paid endorsement" when applicable. Of course, if you're on the the bus and you see a print/poster ad with some celebrity or another and a company's logo, intuitively you know it's an advertisement you're looking at. And that's the point: if a blogger blogs about how wonderful product XYX is, you're not likely to know it's an advertisement unless he or she discloses this fact.

Does this set a legal precedent that Bloggers now are legally the same as the New York Times when it comes to things like press conferences and other media access?

No, for about a dozen different reasons, #1 of which is "The law doesn't have to make sense."

So long as print media aren't under the same rules, it amounts to discrimination.

"Bad ideas," "wrong ideas," and "unconstitutional ideas" are not coterminous categories.

Did you read the FTC thing? They are singling out blogs.

Are you 100% confident they don't have some related set of rules for TV ads? I don't imagine that JK Harris puts "Words of actual customer spoken by an actor" at the bottom of their commercials because they have a high-minded regard for the truth.

We don't mix business and advertising.

Spit take! Aside from being the silliest quote of the week, do you still have no clue what Bradley's business is?

Megan, what do you think of this: (totally off topic BTW)
http://www.forbes.com/2009/10/03/community-reinvestment-act-mortgages-housing-opinions-contributors-peter-schweizer.html

Was CRA the excuse banks used to allow them to continue inflating the housing bubble?

Well, I and like-minded people can't buy newspaper ads for or against political candidates 60 days before an election beyond certain dollar value, so what is the big deal here?

Virginia Postrel

Don't forget Amazon bucks from the kitchen blogging. The FTC might not believe you really like the stuff.

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