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IAB Calls on FTC to Scrap Blogger Rules

The principal trade group representing the online advertising industry is calling on the Federal Trade Commission to rescind the rules it recently announced that would require bloggers to make disclosures about the companies and products they endorse.

In a letter to FTC Chairman Jon Leibowitz, IAB President and CEO Randall Rothenberg argued that the guidelines create a double standard that holds bloggers to a tougher standard than traditional media, and suggested that they could be unconstitutional.

The problem, Rothenberg explained, was the FTC's apparent suggestion that bloggers who receive free copies of books or products to review should be required to make more explicit disclosures than newspapers and other traditional media outlets.

He highlighted a passage from the guidelines that argued that consumers have different expectations from reviewers at institutions like newspapers than individual bloggers. Knowing that a person who posted a glowing write-up of a product on his personal blog had a relationship with the company might affect the "weight" consumers gave to the review.

Hogwash, cried Rothenberg.

"Does the FTC really intend to probe America’s opinion-mongering apparatus this closely?" he asked. "Do you have a team of Freuds and Jungs able to examine 'the weight' consumers give such opinion -- and the way they weigh that weight?"

It would be an understatement to say that the rise of user-generated content and social media -- particularly as a marketing channel -- has complicated the issue of truth-in-advertising considerably. The FTC guidelines would not be limited to personal blogs, but, hypothetically, could extend to other social media activities such as endorsements individuals post to their profiles on sites like Facebook and Twitter.

But Rothenberg argued that at a time when traditional media outlets are trying to drag themselves into the Web 2.0 era, the lines are blurring between newspapers and blogs, so drawing a line in the sand as the new guidelines seem to do makes less sense than ever.

"For the 400 members of the Interactive Advertising Bureau, most of which are small and medium-sized enterprises struggling to build their businesses in the face of the worst decline in marketing spending since the 1930s, the implication that online social media represent a separate class of communications channels with less Constitutional protection than corporate-owned newspapers, radio stations, or cable television networks is of particularly grave concern," he said.

An FTC spokeswoman said the agency did not immediately have a comment on the IAB's letter, but that it planned to issue a statement soon. However, FTC officials have scrambled to clarify the intent of the guidelines in response to the firestorm they set off.

They have argued that the penalty of $11,000 the rules establish rule in practice likely never be levied against an individual blogger. They say they are interested in going after the advertisers rather than the bloggers they co-opt, though Rothenberg challenged that notion in his letter.

He said that he had proposed to arrange a meeting for bloggers and social media executives to consult with FTC staffers when the commission said it planned to revise its guidelines earlier this year, but that they had not taken him up on his offer.

The new guidelines, the FTC's first update to its rules governing endorsements and testimonials since 1980, are set to take effect Dec. 1.