“Bloggers Mugged by Regulators Become Economic Libertarians”

Gordon Crovitz on the FTC’s new guidelines on endorsements and testimonials and the blogosphere’s reaction.

The guidelines require people to disclose online if they have what the FTC vaguely defines as “material connections” with the sellers of a product or service. This could include getting free samples on which they base comments or reviews. Bloggers objected to the double standard that exempts traditional media from the rules—many newspapers, magazines and broadcasters accept free books and other products for their reviewers. . . .

The reaction to the regulations was so strong that last week the FTC tried to step back. The agency said it planned to bring actions against companies as advertisers, not against bloggers or individuals. But the draft rules cover anyone who comments on products and fails to disclose a relationship, even getting a free CD or music download and then commenting on the song. . . .

There should be more disclosure, but the Web is different from earlier media in ways that make government regulation less relevant and practical. The Web has its own self-regulatory mechanisms. Failing to disclose interests sullies one’s reputation online, and reputation harm travels faster and lasts longer than it did before the Web.

There’s also greater need for caveat emptor online, because there is no practical way that any government agency can monitor the world’s bloggers and posters. There will always be people who post comments about products and services that are self-serving in one way or another, at least by someone’s definition.

This is why independent brands that stand for objectivity continue to flourish. ConsumerReports.org has more than three million paying subscribers even with—especially with?—the many free product reviews posted by consumers online. Many of the most consistently popular bloggers have likewise earned reputations for operating with full transparency, which contributes to their popularity.

Instead of trying to extend analog-era regulations onto the Web, the FTC should encourage readers to be vigilant about assessing for themselves the independence of sources online.