FTC Makes Law Abridging the Freedom of Bloggers

October 5, 2009. The Federal Trade Commission (FTC) released a notice [PDF], to be published in the Federal Register, that announces, describes, recites, and sets the effective date (December 1, 2009) of, its revisions to its "Guides Concerning the Use of Endorsements and Testimonials in Advertising".

Much of this notice pertains to commercial advertising. However, it also announces the FTC's intent both to delve into regulating the speech of individuals on the internet, and to do so inconsistently from its regulation of the speech of "traditional media".

For example, an individual blogger who receives a free copy of a video game, and writes about it, faces a federal civil enforcement action if he does not disclose that he received the free copy.

It is a massive document, 81 pages long, with 81 references to bloggers. These revisions includes examples with hypothetical people with personal blogs -- a lady with a dog, and a student who plays video games. The FTC now expands its regulation of their online speech. Whether any of these people will read or care about these 81 pages of legal rules is another question.

The relevant statute is Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45. It is short and vague, but serves as authority for much of what the FTC does. It does not reference blogging.

It provides, in relevant part, that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful."

The just released notice provides guidance regarding the circumstances under which the FTC might bring a civil enforcement action for violation of Section 5 against an individual blogger.

The new guidelines contain pages of new requirements and explanations for a hypothetical lady who blogs about her dog. The FTC's document does not expressly reference cats, but by analogy the FTC's new requirements would also apply to cat ladies, as well as owners of domestic pets generally.

The FTC offered this justification for regulating the speech of individual bloggers: "When the Commission adopted the Guides in 1980, endorsements were disseminated by advertisers -- not by the endorsers themselves -- through such traditional media as television commercials and print advertisements. With such media, the duty to disclose material connections between the advertiser and the endorser naturally fell on the advertiser. The recent creation of consumer-generated media means that in many instances, endorsements are now disseminated by the endorser, rather than by the sponsoring advertiser. In these contexts, the Commission believes that the endorser is the party primarily responsible for disclosing material connections with the advertiser."

The FTC's news guides also regulate the speech of individuals who post comments in online message boards. It provides this example: "An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer's product. Knowledge of this poster's employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board."

The FTC could have restricted its regulation of online speech by individual bloggers to the corporate advertisers who sponsor or compensate these individual bloggers. But, it determined not to do so.

Moreover, the FTC in this notice "acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media". More specifically, the FTC holds bloggers to more burdensome disclosure requirements.

So, for example, the FTC notice states, if a "blogger" and "traditional media" are sent video games at no charge, and write reviews, the "blogger", but not the "traditional media", must disclose the nonpayment for the video game. The FTC notice reasons that, regardless of the content of the reviews, the former is an "endorsement" under the FTC's guides, while the latter is not.

Also, the just released notice does not put all speakers on notice as to whether that speaker will be classified by the FTC as a "blogger" or a "traditional media", and hence, which rules apply to it.

The FTC is a entity created, authorized and funded by the Congress. It is therefore equally bound by the First Amendment's requirement that "Congress shall make no law ... abridging the freedom of speech, or of the press".

The FTC's guides constitute a law abridging the freedom of bloggers.

The FTC's guide also offends the First Amendment in a second respect. The disparate treatment of different classes of speakers amounts to a prohibited licensing regime. When one class of people is permitted by government to engage in an activity, while another class is not, this is the essence of a licensing regime.

As former Chief Justice of the Supreme Court of the U.S., Warren Burger, wrote in his concurring opinion in FNB v. Belotti, "The very task of including some entities within the ``institutional press´´ while excluding others, whether undertaken by legislature, court, or administrative agency, is reminiscent of the abhorred licensing system of Tudor and Stuart England -- a system the First Amendment was intended to ban from this country."

Chief Justice Burger continued that "Because the First Amendment was meant to guarantee freedom to express and communicate ideas, I can see no difference between the right of those who seek to disseminate ideas by way of a newspaper and those who give lectures or speeches and seek to enlarge the audience by publication and wide dissemination".

"In short, the First Amendment does not ``belong´´ to any definable category of persons or entities: It belongs to all who exercise its freedoms." See, First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978).

The FTC notice addresses the First Amendment at length, but only in examining its restrictions on the use of testimonials in advertising. It concludes that its guides "withstands Constitutional scrutiny" and "will not impermissibly chill truthful speech in violation of the First Amendment". The FTC notice does not address the First Amendment in the context of its restrictions on bloggers, and the disparate treatment of bloggers.

As of the October 6, 2009, issue of the Federal Register, the FTC had not yet published this notice.

The statute upon which the FTC relies in regulating advertising, and now bloggers, contains the limitation of "in or affecting commerce". This statutory authority does not extend to political contributions, advertising and speech. However, the Federal Election Commission (FEC) regulates those activities. In recent years it considered, but withdrew from, regulating bloggers' political speech in a manner analogous to the FTC's just announced intent to regulate bloggers' "in or affecting commerce" speech.

For more on FEC regulation of bloggers see: