Posts about regulation

FTC regulates our speech

October 5, 2009 by Jeff Jarvis
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The Federal Trade Commission just released rules to regulate product endorsements not just in advertisements but also on blogs. (PDF here; the regs don’t start until page 55.)

It is a monument to unintended consequence, hidden dangers, and dangerous assumptions.

Mind you, I hate one of its apparent targets: Pay Per Post and its ilk, which attempt to co-opt the voice of bloggers. But I hate government regulation of speech more.

And mind you, I am all in favor of transparency; I disclose to a comic fault here. I think that openness is the best fix for questions of trust and advise companies and politicians and certainly governments to become transparent by default as enlightened self-interest. But mandating this for anyone who dares speak online? Foolish.

There are so many bad assumptions inherent in the FTC’s rules.

First, Pay Per Post et al, as I realized late to the game, are not aimed at fooling consumers. Who would read the boring, sycophantic drivel its people write? No, they are aimed at fooling Google and its algorithms. It’s human spam. And it’s Google’s job to regulate that.

Second, the FTC assumes – as media people do – that the internet is a medium. It’s not. It’s a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don’t think they are doing anything remotely connected to journalism. I imagine that virtually no one on Facebook thinks they’re making media. They’re connecting. They’re talking. So for the FTC to go after bloggers and social media – as they explicitly do – is the same as sending a government goon into Denny’s to listen to the conversations in the corner booth and demand that you disclose that your Uncle Vinnie owns the pizzeria whose product you just endorsed.

Insanity and inanity. And danger.

The regulations raise no end of questions. For example: How much do I have disclose? Before I say anything nice about anyone, do I need to list every advertiser I’ve ever had? Every possible business relationship? You think my disclosures are comical now, just wait.

And what about automated ads, such as those from Google? I have been writing nice things about my treatment at Sloan Kettering. This has caused ads to come up on my blog, via Google, from the hospital. Presuming someone clicked on them, I’ve made money from the hospital. Does that taint what I say or me if I don’t disclose the payment? That’s the level of absurdity this can reach.

The regulations are not aimed just as bloggers, of course, but at endorsements of all sorts, including from celebrities and experts. The FTC requires advertisers to continually reconfirm that endorsers are bona fide users of the endorsed product. Do we really believe that Tiger Woods drives a Buick? How will that be policed?

The FTC also concedes that it treats critics at publications differently – less stringently – than bloggers. Don’t they realize that people on travel and gadget and food publications get freebies all the time. I’ve long believed that ethics alone should compel them to disclose. But the FTC doesn’t.

I love this one: The FTC now forbids media advertisers from changing a critic’s opinion in a blurb. Ha! That happened to me constantly when I was a critic. (“Colossal piece of crap” became “Colossal! – Jeff Jarvis, People”.) I even wrote a column in People complaining about an “NBC pinhead” doing this. A few weeks later, my colleague on the launch of Entertainment Weekly, went to Burbank for a business meeting with the network with an exec who identified himself as that pinhead.

Note, by the way, that when I did cover entertainment in Time Inc., conflict came not only from advertisers (Hallmark pulled all its advertising after I dared give Hall of Fame
treacle the reviews it deserved) but also from within the company (the head of HBO wanted me fired and the editors of Time Inc. tried to change my opinions). How the hell could that be regulated? Only by my fighting back, it turned out.

And there is the greatest myth embedded within the FTC’s rules: that the government can and should sanitize the internet for our protection. The internet is the world and the world is messy and I don’t want anyone – not the government, not a newspaper editor – to clean it up for me, for I fear what will go out in the garbage: namely, my rights.

What I now truly dread is that the FTC is holding hearings about journalism on Dec. 1 and 2. As Star-Ledger editor Jim Willse (full disclosure: he hired me a few times) said in my Guardian podcast last month (full disclosure: I work for the Guardian): the words, “we’re from the government, we’re here to help,” should be met with trepidation.

: See also Reason’s take. More comments from others coming soon.

Dan Gillmor sees full employment for First Amendment attorneys.

Steve Garfield’s disclosure is longer than his post. Fit that in Twitter.

Andrew Keen says the regs should include “bent reviewers on Amazon.” Damn, Keen and I are agreeing too much these days.

FTC guy tells blogger to return books after a review. These people have no clue as to reality. Publishers don’t want them back.

Here’s Fortune on the story.

Here‘s the Guardian’s Bobbie Johnson, unsure about the regs. And here‘s Daniel Tunkelang, also debating with himself.

Techdirt points out more absurdities.

Jack Shafer calls the rules the FTC’s mad power grab.

Pity the big, bad wolf

February 27, 2008 by Jeff Jarvis
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A post written for Comment is Free on the Microsoft fine; crossposted here. Interesting comments already underway over there.)

I have a theory about the regulation of companies that get too big and too powerful: by the time government notices they really are so powerful, they are usually already in decline, having grown too big.

The EU today levied a record €899m (£680m) fine – adding up to a total of €1.7bn in the past four years – against Microsoft for charging “unreasonable” prices for access to its code.

The EU competition commissioner, Neelie Kroes, wanted to pile on even more: another €600m for good measure. Take that, big, bad Microsoft!

Except, in my mind, Microsoft is turning into a bit of a laughing stock these days for trying to buy Yahoo, which itself is a company in rapid decline.

The reason Microsoft is desperate to do this is that, even after all these years, it still does not have a successful internet strategy. So it is trying to buy one.

But I say it is buying the wrong one, a strategy based on an old-media worldview in which we are all masses that can be bought and sold. Microsoft – like too many advertisers and media companies – thinks we think of the internet as just another TV. It believes it can own content and technology when, in truth, we own it now.

Microsoft just yesterday released some of its code under a new “open source interoperability initiative” that offers open interfaces, support for standards, data portability and cooperation with third parties.

Of course, a cynic might say that doing this only a day before its record fine was Microsoft’s way to suck up to the teacher and avoid punishment; the cynic would have a fair point.

But it’s also true that Microsoft needs to open up to play in the internet or it will continue to be left behind by the open and free movements that are taking over operating systems, browsers and – with Google’s goosing – office software.

One could also see the move as a mark of desperation. Poor Microsoft.

In the US, regulators and activists continue to rail at media companies that they say have grown too big. But these media conglomerates, too, are pathetic shells of their former powerful selves, shrinking in audience and advertising at ever faster rates. The internet is killing their mass models, and they don’t know what to do about it.

Their response, like Microsoft’s, has been to buy up competitors, to grow bigger. But that strategy is not working: witness the collapse of the radio giant Clear Channel into a private company and the tragic gobbling up of the newspaper chain Knight Ridder and the cross-media synergy giant Tribune Company.

It might make more sense for the conglomerates to invest, like Microsoft, in new companies, or even in their own innovation. But they have lost the touch. Poor conglomerates.

Looking back, I could even argue that the breaking up of telecoms companies that grew too big only presaged the inevitable opening up of communications that led to the decline of the split-up telcos and their desire now to reconsolidate.

This should be a children’s story, in which, at the end, we discover that the big, bad, scary monster is actually a pussycat inside, and a sad and lonely one at that. Paint these giants as dinosaurs with tears in their eyes.

And their regulatory conquerors? Are they knights in shining armour or are they the real bullies?

Either way, I’m not scared of Microsoft any more.