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FTC to Crack Down on Paid Celebrity Posts That Aren’t Clear Ads

132 points by lnguyen 10y ago

sjtgraham 10y ago
CLOTH TALK: THEY DON'T WANT YOU TO SHILL ON SOCIAL MEDIA, SO WHAT WE GONNA DO…?
jackfoxy 10y ago
It would be enlightening to trace the development from the 1st Amendment to the FTC having the power to implement regulations like this. Are these dangerous products? Do they fraudulently promise benefits? Are they targeting minors?
- ISL 10y ago
  Agreed. While the Supreme Court has sensibly concluded that there should be limits to free speech (see 'The Court held that government cannot punish inflammatory speech unless that speech is directed to inciting, and is likely to incite, imminent lawless action.'[1]), it would be interesting to understand how the legal argument that begins with the postulate: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. can yield, 'We believe consumers put stock in endorsements and we want to make sure they are not being deceived.' [1] https://en.wikipedia.org/wiki/Brandenburg_v._Ohio https://en.wikipedia.org/wiki/Brandenburg_v._Ohio
  - cmdrfred 10y ago
    While I agree that the constitutional interpretation is flawed here. It seems we have thrown[0] it[1] out[2] the[3] window[4] for the most part. [0]https://www.aclu.org/issues/criminal-law-reform/reforming-police-practices/asset-forfeiture-abuse https://www.aclu.org/issues/criminal-law-reform/reforming-po... [1]https://www.thefire.org/college-students-protest-against-so-called-free-speech-zones-at-their-campuses-saying-that-they-violate-their-first-amendment-rights/ https://www.thefire.org/college-students-protest-against-so-... [2]https://en.wikipedia.org/wiki/Federal_Assault_Weapons_Ban https://en.wikipedia.org/wiki/Federal_Assault_Weapons_Ban [3]https://en.wikipedia.org/wiki/Internment_of_Japanese_Americans https://en.wikipedia.org/wiki/Internment_of_Japanese_America... [4]https://en.wikipedia.org/wiki/PRISM_%28surveillance_program%29 https://en.wikipedia.org/wiki/PRISM_%28surveillance_program%...
  - dragonwriter 10y ago
    That's because you forgot several other "postulates" that form part of that legal argument. Among them (this is not an exclusive list) are the Commerce Clause of the Constitution, and various canons of legal construction, including the one that holds that while a newer enactment generally has precedence over an older one, to the extent possible a newer enactment should also be read so as not to minimize conflict with an older one unless it explicitly seeks to reverse the effect of the older one.
- lmkg 10y ago
  There is no infringement of free speech going on. Celebrities are free to make endorsements, paid or otherwise. Companies are free to market their products in this fashion. The only requirement is that paid endorsements are labeled as such, which is not cumbersome or "chilling."
  - count 10y ago
    Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent). Arguably, such labeling would also defeat the purpose or diminish the entirety of such advertisements, which infringes on the speech of the advertiser AND of the celebrity. Devils advocate says that FDA mandates labels on food...which is also compelled speech that may be disadvantageous to producers. How is this different?
    - chimeracoder 10y ago
      > Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent). We already have plenty of restrictions on speech (the most well-known ones being slander and libel, but also plenty of regulations around speech that comes in the form of advertising specifically). In this case, you still have two options: a) make the post, but also reveal that it was paid for, or b) don't make the post It's not really forced speech when you still have two options, and one of them includes 'not saying anything'. It's also a pretty reasonable argument to make that making the paid post but not disclosing it is misleading, and there are already all sorts of laws restricting misleading speech in advertising. Also, this only kicks in if the post is commercial - ie, if money changes hands. To give a "bright line" counterexample, it doesn't restrict celebrities from making posts about their favorite products if they have had no communication with the company at all.
      - cmdrfred 10y ago
        You forget option c. c) Don't get paid for the post and simply support the product because you believe in it.
      - 10y ago
- jonhohle 10y ago
  I don't see a significant conflict of interest. Nothing stops a celebrity or influencer from saying they love Foo Brand Widgets. The FTC is saying in the context of a business transaction which involves a company paying another individual to say that they love Foo Brand Widgets, there must be disclosure. I could see not disclosing as a form of fraud. I also don't see it as significantly different from labels the FDA requires on food packaging.
  - joecool1029 10y ago
    Is there any court precidence for cases of failure to disclose? Fraud is really a stretch... Consider puffery: https://en.wikipedia.org/wiki/Puffery https://en.wikipedia.org/wiki/Puffery
    - blowski 10y ago
      If Company A Laptops secretly paid Mr Celebrity to say he only uses Company A laptops, and then I buy a Company A laptop because I want to use the same brand as Mr Celebrity, then I could argue that Company A have engaged in deceptive marketing. If they are up front about having paid Mr Celebrity, it seems to mitigate that a bit, because it's clearly a 'puff piece' (as your link says) instead of claiming to be true. IANAL. Obviously. But that's my layman's take on it.
      - slang800 10y ago
        I would argue that it's your fault for trusting Mr Celebrity to give you good laptop recommendations. If Mr Celebrity's reputation isn't crippled by making a bad recommendation or two then you're picking the wrong people to advise you.
    - sliverstorm 10y ago
      Are paid endorsements really puffery? Basketball players sponsored by Nike don't wear Nike shoes ironically. (A comedy advert, like the Terry Tate: Office Linebacker campaign, seems closer to puffery)
- cloudjacker 10y ago
  Do they have a history of settlements with various conditions that masquerade as case law? Yes.
- sjtgraham 10y ago
  Valentine v. Chrestensen: First Amendment does not protect “purely commercial advertising.”
  - count 10y ago
    What if they actually love the product, AND happens to be paid for it? ie: already drink a specific type of liquor, liquor company finds out and offers to sponsor them...
    - cgriswald 10y ago
      Which probably makes this difficult to enforce. Agent meets with advertiser. No promises are made. Celebrity posts about loving product. Then advertiser sponsors them. Defense: "I like the product and was doing this to help get the job."
  - rayiner 10y ago
    That case was overturned by: https://en.wikipedia.org/wiki/Virginia_State_Pharmacy_Board_v._Virginia_Citizens_Consumer_Council https://en.wikipedia.org/wiki/Virginia_State_Pharmacy_Board_....
    - sjtgraham 10y ago
      Thanks. Glad to have an actual lawyer appear at times like these :) So is this legal?
      - rayiner 10y ago
        Right now the boundary for restrictions on commercial speech seems to lie right around labeling for GMOs. Calorie labeling is okay because its purely informational, factually neutral, and has a direct link to a real concrete government interest. GMO labeling is on the border because there is a strong political element to it, and there is no proof GMOs (unlike too many calories) are actually bad and therefore it does not implicate a government interest. I would think the FTC's action is substantially over that line.
- belorn 10y ago
  Is FTC cracking down on celebrity posts in general, or are they cracking down on companies which celebrities are self-employed in, and that sell advertisement? Companies are made of people, and people have human rights. However, in order to have any market regulations at all, we need to limit what companies can say and do. As such we normally separate what people do in the name of a company, and what people do as a private citizen. For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force.
  - MrMullen 10y ago
    > Companies are made of people, and people have human rights. Companies are a fictitious, they are not natural, they don't exist without people or laws and they exist only to serve the betterment of society. Just because humans have right does not mean companies do. > For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force. Poor example. Police are public servants and don't work for companies, they work for society and all of society and how they behave off duty is an excellent reflection of how they would behave on duty. If a police officer posts racist Facebook posts, they can and should be fired.
    - oldmanjay 10y ago
      Companies are groups of people acting in concert toward goals. There is very little that is more natural for social primates like humans to do. Your distinction and definitions are the real fiction.
      - tunap 10y ago
        I agree with this definition. Additionaly, these same groups of people should be held accountable in a court of law for crimes performed/delegated from behind the facade of a "corporate" entity.
- dec0dedab0de 10y ago
  Another thing is that there is no way to %100 enforce this, so this gives the FTC the ability to pick and choose who is targetted. Seems ripe for corruption to me. I think a better service would be to provide a credibility rating service, where people can vote on a celebrities endorsement history. Though there's no money from fines in that.
- colechristensen 10y ago
  I think the authority is firmly routed in the commerce clause of the constitution, and that it is perfectly reasonable for it to be so. The difference is speaking your mind and being paid to. The first amendment is not a license to do or say anything for any reason.
iamben 10y ago
It's an interesting one for sure. I wonder how it would apply to Hip Hop, for instance. Rapper has deal (money/product/whatever) with a brand and endorses them through song. We don't really have liner notes anymore, but it's clearly paid promotion. I appreciate this isn't a 'post', but the article talks about sitcoms. And if you take music as 'art', there's probably a case where you could argue your instagram/video/whatever was 'art'.
- cmdrfred 10y ago
  Rapper: YO YO YO, Mister Clean has it all, I use it before I ball, check it. Fast speaking car commercial voice (quietly in background): Paid for by Mister Clean enterprises inc, the views in this song do not represent Mister Clean.
  - donatj 10y ago
    For a real example: Me not working hard? Yeah, right! Picture that with a Kodak Or, better yet, go to Times Square Take a picture of me with a Kodak From Pitbull "Give me Everything"
    - tehwebguy 10y ago
      That rhyme was unforgivable even without the possible endorsement. See other possible endorsements here: http://genius.com/rapstats?q=Michael%20Kors%2C%20Gucci%2C%20Coach%2C%20Prada%2C%20Fendi http://genius.com/rapstats?q=Michael%20Kors%2C%20Gucci%2C%20... Not sure where to draw the line for Gucci though since a rapper is called Gucci Mane and it means something else to say "I'm Gucci"
    - cmdrfred 10y ago
      Has to be an ad, why wouldn't you go with something like this artistically? Me not working hard? Yeah, right! Picture that with a Kodak Or, better yet, go to Times Square Take a picture of me with some Cognac
      - 10y ago
erdevs 10y ago
This is long overdue. And adding an "#ad" tag or the like isn't cumbersome.
will_brown 10y ago
In many ways the limits on commercial speech make sense, we don't want people selling snake oil claiming it is the cure for cancer. Certainly that is an extreme and doesn't suggest the same is true of good-faith product endorsement on IG without disclosure, but the same potential for abuse exists, especially on highly regulated products that have very specific advertising regulations (i.e. alcohol and tobacco) that might be advertised in good faith. I think one of the most bizarre applications to date is the Martha Stewart case. During her insider trading case, she actually picked up new charges for securities fraud because throughout the insider trading case she continually proclaimed her innocence. Now I think if Free Speech protects anything, it should protect our ability to proclaim our innocence publicly when the government charges us with a crime; however, the new charges alleged she proclaimed her innocence with the specific intent of artificially and fraudulently propping up the stock of the Martha Stewart company. These new charges carried up to 20 years, but ultimately the prosecutors dismissed them when she was found guilty and sentenced for the insider trading charges. It would have been a very interesting case from a legal perspective.
- tuna-piano 10y ago
  Wow, this is quite interesting to think about. 1- If your company had an asset (Martha Stewart's brand) that you know is about to become a lot less valuable, saying "the asset will not become less valuable", when you know that to be a lie, should be considered fraud. 2- clearly, if charged with a crime, you have a right to speak out and proclaim your innocence. Two fundamental things that are opposed to each other. Which should win out?
  - akiselev 10y ago
    IANAL but it seems to me that free speech always loses to fiduciary responsibility and SEC disclosure requirements because those are all responsibilities you pick up with your own free will.
  - superuser2 10y ago
    >you have a right to speak out and proclaim your innocence. This isn't so clear. You have a right to not proclaim your guilt, but you exercise that right by not speaking. The right against self-incrimination does not permit lying. The law has long recognized certain situations in which you're not allowed to lie - while making sworn testimony, while being interviewed by federal investigators, etc. People can and do go to jail for lying to the effect of "I didn't do it" even if the trial on the original charge doesn't result in a conviction. Speaking to the public in a way that influences securities prices is another one of those situations where lying is illegal.
morgante 10y ago
I'm skeptical of the FTC's position here. In particular, I fail to see the difference between social posts and traditional product placements. > A character on a sitcom drinking a Diet Pepsi isn’t giving their personal opinion about the soda, and the actor is playing a character. A celebrity is also playing a character. Also, if they're filtering the choices of what to endorse based on their personal views (as many of the influencers are), doesn't that make it less of an ad? I also don't see why a "#sponsored" hash tag is not enough. Anyone who cares can understand hash tags.
- kbenson 10y ago
  > Also, if they're filtering the choices of what to endorse based on their personal views (as many of the influencers are), doesn't that make it less of an ad? A distinction is useful because it allows people to categorize for themselves what they think is a worthwhile sponsership. It's adding information to the market which wasn't present (or was hard to acquire) beforehand, which is always useful. For a simple example, imagine an endorsement of makeup by Kim Kardashian, and a shop tool by Adam Savage. Initially you believe they are using the products because they like them and think they work well. Now you learn they were paid endorsements. Do you provide the same level of confidence to the suggestions of these two people based on paid endorsements that you do if they are not paid for those endorsements? I don't. One of them I trust to care about their integrity and reputation with respect to this, the other I do not. > I also don't see why a "#sponsored" hash tag is not enough. Anyone who cares can understand hash tags. Because the whole world isn't twitter, and hash tags don't always make sense. how do you hash tag a segment of a podcast?
  - morgante 10y ago
    I wouldn't trust an endorsement of anything from Kim Kardashian regardless of whether it was paid or not. For me at least, this is largely self-policing. The people and sites who I would actually trust in purchasing decisions would take pains to disclose any compensation regardless of whether the FTC mandates it. Trust is a market. > Because the whole world isn't twitter, and hash tags don't always make sense. how do you hash tag a segment of a podcast? Obviously you should use a medium-appropriate disclosure. My issue is that the FTC seems to believe that "#sponsored" isn't even appropriate for platforms where hashtags are used (like Instagram).
notananthem 10y ago
Hip hop will float by as it always has with sampling, endorsements, back deals. High profile cases will be slapped but illegal, y que.
- 6stringmerc 10y ago
  Hip hop constantly gets slapped around by sampling cases when there's money to be made (e.g. not mixtapes). Timbaland alone has around half a dozen. Even Frank Ocean got an earful from The Eagles.
6stringmerc 10y ago
Good, and I hope it has lasting effects on the approach to advertising in the modern era. I'm sure the system will be imperfect, but the push-pull of the "Ad Biz" is something I've learned first hand. You know, the fine print. GI JOE SKY STRIKER JET DOES NOT ACTUALLY FLY Personally I like to know when somebody is acting as a paid shill. In that vein I feel my endorsements - at this time uncompensated in any fashion (DistroKid, Ernie Ball strings, Agile Guitars) - have value. I speak from personal authority, not because somebody cut me a check or sent freebies. I'm not a big spender, so I try to treat my public endorsements as genuinely worth something because if I'm willing to pay for it myself, and I believe in the product, then that's what the point of talking about things is in word-of-mouth business! If I get an opportunity to "test" something without paying, I'm going to disclose that right away. It just feels...ethical...Every once and a while I watch the Aqua Teen Hunger Force episode "Boost Mobile" and soak in the delicious mockery of celebrity endorsements. YMMV. Or, for any who think the FTC is maybe over-stepping a bit, let's consider the other avenue that gets talked about as a "First Amendment" adjacent issue: Astroturfing.
- iamben 10y ago
  Where do you think the line should be drawn? I mean - say your band does great (if you have one / if it isn't already ;-)). You choose Ernie Ball strings and an Agile Guitar and play the hell out of them. You accumulate a million fans on Instagram. A ton of photos show you with the guitar / string combo. Now Ernie Ball says "we want to pay you [number] per year to just use our strings!" You love Ernie so are happy to take their cash. Do all your IG pics now need an endorsement line? What if then a new guitar brand asks to you to use their guitars? And they're amazing. You'd use them for free anyway... Etc. I think the lines are blurry. But I agree - the celebrity promoting the teeth whitening rebill to eager teens probably needs to point out their teeth are white for a different reason.
  - alexburton 10y ago
    I think you have made it pretty clear. In scenario one, the second you take money from a brand you are promoting, it becomes an endorsement and you should let your audience know. in scenario two, if you use the guitars for free, cool, but if you switch because of an monetary agreement or somewhere down the road you are paid then it is an endorsement.
danvoell 10y ago
There is an extremely fine line here. The people who make real money based on "endorsements" are business owners. They favor companies in which they receive some sort of benefit, whether implicit or not. The people who will suffer most from this are those hustling to make it, not the heavyweights.
kevin_thibedeau 10y ago
How about banning all native ads masquerading as articles "recommended for you".

132 points by lnguyen 10y ago

CLOTH TALK: THEY DON'T WANT YOU TO SHILL ON SOCIAL MEDIA, SO WHAT WE GONNA DO…?

It would be enlightening to trace the development from the 1st Amendment to the FTC having the power to implement regulations like this. Are these dangerous products? Do they fraudulently promise benefits? Are they targeting minors?

ISL 10y ago
Agreed. While the Supreme Court has sensibly concluded that there should be limits to free speech (see 'The Court held that government cannot punish inflammatory speech unless that speech is directed to inciting, and is likely to incite, imminent lawless action.'[1]), it would be interesting to understand how the legal argument that begins with the postulate: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. can yield, 'We believe consumers put stock in endorsements and we want to make sure they are not being deceived.' [1] https://en.wikipedia.org/wiki/Brandenburg_v._Ohio https://en.wikipedia.org/wiki/Brandenburg_v._Ohio
- cmdrfred 10y ago
  While I agree that the constitutional interpretation is flawed here. It seems we have thrown[0] it[1] out[2] the[3] window[4] for the most part. [0]https://www.aclu.org/issues/criminal-law-reform/reforming-police-practices/asset-forfeiture-abuse https://www.aclu.org/issues/criminal-law-reform/reforming-po... [1]https://www.thefire.org/college-students-protest-against-so-called-free-speech-zones-at-their-campuses-saying-that-they-violate-their-first-amendment-rights/ https://www.thefire.org/college-students-protest-against-so-... [2]https://en.wikipedia.org/wiki/Federal_Assault_Weapons_Ban https://en.wikipedia.org/wiki/Federal_Assault_Weapons_Ban [3]https://en.wikipedia.org/wiki/Internment_of_Japanese_Americans https://en.wikipedia.org/wiki/Internment_of_Japanese_America... [4]https://en.wikipedia.org/wiki/PRISM_%28surveillance_program%29 https://en.wikipedia.org/wiki/PRISM_%28surveillance_program%...
- dragonwriter 10y ago
  That's because you forgot several other "postulates" that form part of that legal argument. Among them (this is not an exclusive list) are the Commerce Clause of the Constitution, and various canons of legal construction, including the one that holds that while a newer enactment generally has precedence over an older one, to the extent possible a newer enactment should also be read so as not to minimize conflict with an older one unless it explicitly seeks to reverse the effect of the older one.
lmkg 10y ago
There is no infringement of free speech going on. Celebrities are free to make endorsements, paid or otherwise. Companies are free to market their products in this fashion. The only requirement is that paid endorsements are labeled as such, which is not cumbersome or "chilling."
- count 10y ago
  Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent). Arguably, such labeling would also defeat the purpose or diminish the entirety of such advertisements, which infringes on the speech of the advertiser AND of the celebrity. Devils advocate says that FDA mandates labels on food...which is also compelled speech that may be disadvantageous to producers. How is this different?
  - chimeracoder 10y ago
    > Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent). We already have plenty of restrictions on speech (the most well-known ones being slander and libel, but also plenty of regulations around speech that comes in the form of advertising specifically). In this case, you still have two options: a) make the post, but also reveal that it was paid for, or b) don't make the post It's not really forced speech when you still have two options, and one of them includes 'not saying anything'. It's also a pretty reasonable argument to make that making the paid post but not disclosing it is misleading, and there are already all sorts of laws restricting misleading speech in advertising. Also, this only kicks in if the post is commercial - ie, if money changes hands. To give a "bright line" counterexample, it doesn't restrict celebrities from making posts about their favorite products if they have had no communication with the company at all.
    - cmdrfred 10y ago
      You forget option c. c) Don't get paid for the post and simply support the product because you believe in it.
    - 10y ago
jonhohle 10y ago
I don't see a significant conflict of interest. Nothing stops a celebrity or influencer from saying they love Foo Brand Widgets. The FTC is saying in the context of a business transaction which involves a company paying another individual to say that they love Foo Brand Widgets, there must be disclosure. I could see not disclosing as a form of fraud. I also don't see it as significantly different from labels the FDA requires on food packaging.
- joecool1029 10y ago
  Is there any court precidence for cases of failure to disclose? Fraud is really a stretch... Consider puffery: https://en.wikipedia.org/wiki/Puffery https://en.wikipedia.org/wiki/Puffery
  - blowski 10y ago
    If Company A Laptops secretly paid Mr Celebrity to say he only uses Company A laptops, and then I buy a Company A laptop because I want to use the same brand as Mr Celebrity, then I could argue that Company A have engaged in deceptive marketing. If they are up front about having paid Mr Celebrity, it seems to mitigate that a bit, because it's clearly a 'puff piece' (as your link says) instead of claiming to be true. IANAL. Obviously. But that's my layman's take on it.
    - slang800 10y ago
      I would argue that it's your fault for trusting Mr Celebrity to give you good laptop recommendations. If Mr Celebrity's reputation isn't crippled by making a bad recommendation or two then you're picking the wrong people to advise you.
  - sliverstorm 10y ago
    Are paid endorsements really puffery? Basketball players sponsored by Nike don't wear Nike shoes ironically. (A comedy advert, like the Terry Tate: Office Linebacker campaign, seems closer to puffery)
cloudjacker 10y ago
Do they have a history of settlements with various conditions that masquerade as case law? Yes.
sjtgraham 10y ago
Valentine v. Chrestensen: First Amendment does not protect “purely commercial advertising.”
- count 10y ago
  What if they actually love the product, AND happens to be paid for it? ie: already drink a specific type of liquor, liquor company finds out and offers to sponsor them...
  - cgriswald 10y ago
    Which probably makes this difficult to enforce. Agent meets with advertiser. No promises are made. Celebrity posts about loving product. Then advertiser sponsors them. Defense: "I like the product and was doing this to help get the job."
- rayiner 10y ago
  That case was overturned by: https://en.wikipedia.org/wiki/Virginia_State_Pharmacy_Board_v._Virginia_Citizens_Consumer_Council https://en.wikipedia.org/wiki/Virginia_State_Pharmacy_Board_....
  - sjtgraham 10y ago
    Thanks. Glad to have an actual lawyer appear at times like these :) So is this legal?
    - rayiner 10y ago
      Right now the boundary for restrictions on commercial speech seems to lie right around labeling for GMOs. Calorie labeling is okay because its purely informational, factually neutral, and has a direct link to a real concrete government interest. GMO labeling is on the border because there is a strong political element to it, and there is no proof GMOs (unlike too many calories) are actually bad and therefore it does not implicate a government interest. I would think the FTC's action is substantially over that line.
belorn 10y ago
Is FTC cracking down on celebrity posts in general, or are they cracking down on companies which celebrities are self-employed in, and that sell advertisement? Companies are made of people, and people have human rights. However, in order to have any market regulations at all, we need to limit what companies can say and do. As such we normally separate what people do in the name of a company, and what people do as a private citizen. For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force.
- MrMullen 10y ago
  > Companies are made of people, and people have human rights. Companies are a fictitious, they are not natural, they don't exist without people or laws and they exist only to serve the betterment of society. Just because humans have right does not mean companies do. > For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force. Poor example. Police are public servants and don't work for companies, they work for society and all of society and how they behave off duty is an excellent reflection of how they would behave on duty. If a police officer posts racist Facebook posts, they can and should be fired.
  - oldmanjay 10y ago
    Companies are groups of people acting in concert toward goals. There is very little that is more natural for social primates like humans to do. Your distinction and definitions are the real fiction.
    - tunap 10y ago
      I agree with this definition. Additionaly, these same groups of people should be held accountable in a court of law for crimes performed/delegated from behind the facade of a "corporate" entity.
dec0dedab0de 10y ago
Another thing is that there is no way to %100 enforce this, so this gives the FTC the ability to pick and choose who is targetted. Seems ripe for corruption to me. I think a better service would be to provide a credibility rating service, where people can vote on a celebrities endorsement history. Though there's no money from fines in that.
colechristensen 10y ago
I think the authority is firmly routed in the commerce clause of the constitution, and that it is perfectly reasonable for it to be so. The difference is speaking your mind and being paid to. The first amendment is not a license to do or say anything for any reason.

iamben 10y ago

It's an interesting one for sure. I wonder how it would apply to Hip Hop, for instance. Rapper has deal (money/product/whatever) with a brand and endorses them through song. We don't really have liner notes anymore, but it's clearly paid promotion. I appreciate this isn't a 'post', but the article talks about sitcoms. And if you take music as 'art', there's probably a case where you could argue your instagram/video/whatever was 'art'.

cmdrfred 10y ago
Rapper: YO YO YO, Mister Clean has it all, I use it before I ball, check it. Fast speaking car commercial voice (quietly in background): Paid for by Mister Clean enterprises inc, the views in this song do not represent Mister Clean.
- donatj 10y ago
  For a real example: Me not working hard? Yeah, right! Picture that with a Kodak Or, better yet, go to Times Square Take a picture of me with a Kodak From Pitbull "Give me Everything"
  - tehwebguy 10y ago
    That rhyme was unforgivable even without the possible endorsement. See other possible endorsements here: http://genius.com/rapstats?q=Michael%20Kors%2C%20Gucci%2C%20Coach%2C%20Prada%2C%20Fendi http://genius.com/rapstats?q=Michael%20Kors%2C%20Gucci%2C%20... Not sure where to draw the line for Gucci though since a rapper is called Gucci Mane and it means something else to say "I'm Gucci"
  - cmdrfred 10y ago
    Has to be an ad, why wouldn't you go with something like this artistically? Me not working hard? Yeah, right! Picture that with a Kodak Or, better yet, go to Times Square Take a picture of me with some Cognac
    - 10y ago

erdevs 10y ago

This is long overdue. And adding an "#ad" tag or the like isn't cumbersome.

will_brown 10y ago

In many ways the limits on commercial speech make sense, we don't want people selling snake oil claiming it is the cure for cancer. Certainly that is an extreme and doesn't suggest the same is true of good-faith product endorsement on IG without disclosure, but the same potential for abuse exists, especially on highly regulated products that have very specific advertising regulations (i.e. alcohol and tobacco) that might be advertised in good faith. I think one of the most bizarre applications to date is the Martha Stewart case. During her insider trading case, she actually picked up new charges for securities fraud because throughout the insider trading case she continually proclaimed her innocence. Now I think if Free Speech protects anything, it should protect our ability to proclaim our innocence publicly when the government charges us with a crime; however, the new charges alleged she proclaimed her innocence with the specific intent of artificially and fraudulently propping up the stock of the Martha Stewart company. These new charges carried up to 20 years, but ultimately the prosecutors dismissed them when she was found guilty and sentenced for the insider trading charges. It would have been a very interesting case from a legal perspective.

tuna-piano 10y ago
Wow, this is quite interesting to think about. 1- If your company had an asset (Martha Stewart's brand) that you know is about to become a lot less valuable, saying "the asset will not become less valuable", when you know that to be a lie, should be considered fraud. 2- clearly, if charged with a crime, you have a right to speak out and proclaim your innocence. Two fundamental things that are opposed to each other. Which should win out?
- akiselev 10y ago
  IANAL but it seems to me that free speech always loses to fiduciary responsibility and SEC disclosure requirements because those are all responsibilities you pick up with your own free will.
- superuser2 10y ago
  >you have a right to speak out and proclaim your innocence. This isn't so clear. You have a right to not proclaim your guilt, but you exercise that right by not speaking. The right against self-incrimination does not permit lying. The law has long recognized certain situations in which you're not allowed to lie - while making sworn testimony, while being interviewed by federal investigators, etc. People can and do go to jail for lying to the effect of "I didn't do it" even if the trial on the original charge doesn't result in a conviction. Speaking to the public in a way that influences securities prices is another one of those situations where lying is illegal.

morgante 10y ago

I'm skeptical of the FTC's position here. In particular, I fail to see the difference between social posts and traditional product placements. > A character on a sitcom drinking a Diet Pepsi isn’t giving their personal opinion about the soda, and the actor is playing a character. A celebrity is also playing a character. Also, if they're filtering the choices of what to endorse based on their personal views (as many of the influencers are), doesn't that make it less of an ad? I also don't see why a "#sponsored" hash tag is not enough. Anyone who cares can understand hash tags.

kbenson 10y ago
> Also, if they're filtering the choices of what to endorse based on their personal views (as many of the influencers are), doesn't that make it less of an ad? A distinction is useful because it allows people to categorize for themselves what they think is a worthwhile sponsership. It's adding information to the market which wasn't present (or was hard to acquire) beforehand, which is always useful. For a simple example, imagine an endorsement of makeup by Kim Kardashian, and a shop tool by Adam Savage. Initially you believe they are using the products because they like them and think they work well. Now you learn they were paid endorsements. Do you provide the same level of confidence to the suggestions of these two people based on paid endorsements that you do if they are not paid for those endorsements? I don't. One of them I trust to care about their integrity and reputation with respect to this, the other I do not. > I also don't see why a "#sponsored" hash tag is not enough. Anyone who cares can understand hash tags. Because the whole world isn't twitter, and hash tags don't always make sense. how do you hash tag a segment of a podcast?
- morgante 10y ago
  I wouldn't trust an endorsement of anything from Kim Kardashian regardless of whether it was paid or not. For me at least, this is largely self-policing. The people and sites who I would actually trust in purchasing decisions would take pains to disclose any compensation regardless of whether the FTC mandates it. Trust is a market. > Because the whole world isn't twitter, and hash tags don't always make sense. how do you hash tag a segment of a podcast? Obviously you should use a medium-appropriate disclosure. My issue is that the FTC seems to believe that "#sponsored" isn't even appropriate for platforms where hashtags are used (like Instagram).

notananthem 10y ago

Hip hop will float by as it always has with sampling, endorsements, back deals. High profile cases will be slapped but illegal, y que.

6stringmerc 10y ago
Hip hop constantly gets slapped around by sampling cases when there's money to be made (e.g. not mixtapes). Timbaland alone has around half a dozen. Even Frank Ocean got an earful from The Eagles.

6stringmerc 10y ago

Good, and I hope it has lasting effects on the approach to advertising in the modern era. I'm sure the system will be imperfect, but the push-pull of the "Ad Biz" is something I've learned first hand. You know, the fine print. GI JOE SKY STRIKER JET DOES NOT ACTUALLY FLY Personally I like to know when somebody is acting as a paid shill. In that vein I feel my endorsements - at this time uncompensated in any fashion (DistroKid, Ernie Ball strings, Agile Guitars) - have value. I speak from personal authority, not because somebody cut me a check or sent freebies. I'm not a big spender, so I try to treat my public endorsements as genuinely worth something because if I'm willing to pay for it myself, and I believe in the product, then that's what the point of talking about things is in word-of-mouth business! If I get an opportunity to "test" something without paying, I'm going to disclose that right away. It just feels...ethical...Every once and a while I watch the Aqua Teen Hunger Force episode "Boost Mobile" and soak in the delicious mockery of celebrity endorsements. YMMV. Or, for any who think the FTC is maybe over-stepping a bit, let's consider the other avenue that gets talked about as a "First Amendment" adjacent issue: Astroturfing.

iamben 10y ago
Where do you think the line should be drawn? I mean - say your band does great (if you have one / if it isn't already ;-)). You choose Ernie Ball strings and an Agile Guitar and play the hell out of them. You accumulate a million fans on Instagram. A ton of photos show you with the guitar / string combo. Now Ernie Ball says "we want to pay you [number] per year to just use our strings!" You love Ernie so are happy to take their cash. Do all your IG pics now need an endorsement line? What if then a new guitar brand asks to you to use their guitars? And they're amazing. You'd use them for free anyway... Etc. I think the lines are blurry. But I agree - the celebrity promoting the teeth whitening rebill to eager teens probably needs to point out their teeth are white for a different reason.
- alexburton 10y ago
  I think you have made it pretty clear. In scenario one, the second you take money from a brand you are promoting, it becomes an endorsement and you should let your audience know. in scenario two, if you use the guitars for free, cool, but if you switch because of an monetary agreement or somewhere down the road you are paid then it is an endorsement.

danvoell 10y ago

There is an extremely fine line here. The people who make real money based on "endorsements" are business owners. They favor companies in which they receive some sort of benefit, whether implicit or not. The people who will suffer most from this are those hustling to make it, not the heavyweights.

kevin_thibedeau 10y ago

How about banning all native ads masquerading as articles "recommended for you".