Is MDA asking bloggers to declare their income? An interview with Missy Dotty

As some of you know our beloved MDA is planning to roll out a “new ruling” requiring bloggers to declare their income? Check these two essays out : MDA wants bloggers to declare their income  / MDA wants bloggers to declare sponsorship? How about making circulation audits compulsory first? Could they be right?

Well to be honest with you I don’t know – so recently, I caught up with Missy Dotty our resident legal advisor cum owner of this fabulous site to find out more about this new development.

Darkness Q: Dotty, as you know the MDA is planning to roll up a new guideline to regulate bloggers – there is a lot of rumors circulating in the internet concerning this development – some see it as the end of blogging as we know it; others on the other hand have even compared it as an underhanded method by our government to control blog-o-sphere. Can you give us more information about the origins of this initiative along with why this subject is currently being mooted?

Missy Dotty: What MDA may be doing is taking the cue from a recent guideline that has been issued by the F.T.C. (Federal Trade Commission) based in the US concerning certain revision of rules about endorsements and testimonials in advertising – you need to understand, the F.T.C last issued such guidelines nearly 30 years ago – so this is really a timely update to align many of their fair advertizing guidelines to address the rapidly shifting new-media world and how advertisers are using bloggers and social media sites like Facebook and Twitter to market their products and services.

The general thrust of the F.T.C guideline is bloggers who review products must disclose any connection with advertisers, including the receipt of freebies and whether or not they were paid in any way by advertisers. So it is wrong to suggest this is guideline concerning declaration of income or even origin of income. Nothing could be further from the truth.

The goal of the F.T.C is to protect consumers by ensuring full disclosure – so for example if you happen to operate a prominent food blog and you write a favorable review about a restaurant – all the F.T.C is saying is if you received any freebies; then you should disclose to the reader.

Darkness Q: Is this unusual? I mean is “full disclosure” something that should be reasonably expected from reviews in the new media?

Dotty: It really depends Darkness. In some industries, the practice seems to be more apparent than others. One obvious industry where it is now common practice to provide full disclosure is the financial services and even in the pharmaceutical industry the idea is seen as “best practice”, where the subject matter expert is frequently required to declare whether he owns any stock or has any dealings with the pharmaceutical firm.

But where it continues to less clear Darkness is in general product reviews and this can range from anything from holidays to cosmetics. Its fair to say the F.T.C is looking to bring those others areas into line.

Q: How consistent is this legally?

Dotty: A beter way to structure the question is not to ask how consistent that approach is with the law, this isn’t a parking violation where the law may be expected to operate automatically, it really depends on a case by case basis;  because one can never really be consistent when it comes to product reviews and endorsements; as the line is not very clear. For instance:  not every reviewer writes favorable reviews just because they have been given freebies – many don’t and many even claim it doesnt affect their vocational judgement.

A better question would be to ask; where does the legitimacy or right to full disclosure derive from? – and I think it goes back to the principle of conflict of interest vis-à-vis a testimony can only be entrusted providing the decision maker doesn’t have a vested interest in the outcome – so for example, if I happen to be a judge who has considerable investments in a  firm that happens to be a plaintiff, then it will be a conflict of interest for me to even preside over the proceedings.

The case is very robust; but the question is whether it sits well with the whole idea of how things are transacted in the real world. By this I mean that even the law recognizes implicitly there is a need for some widget space, the idea of hype and spin or what you Darkness would term as the marketing manifesto – so the law will never hold a firm accountable if it decides to market a product under a caption, “red bull makes you a bull.” You can buy a bottle of red bull and drink it and if you don’t transform into a bull; that doesn’t automatically give you a right of claim against the firm as in law it known as an invitation to treat. In other words, it’s just marketing hype.

Darkness: Q How does this whole idea of invitation to treat color the whole question of full disclosure?

Dotty. Its really everything because the law doesn’t treat the average consumer like a baby – so when someone reads an advertisement about hair loss products and even sees a famous celebrity endorsing it; the law actually expects the average consumer to exercise a modicum of care in their assessment to ensure those claims are true – the $64 million question is whether when you read a review about a product in a blog; how reasonable is it to expect the average reader to winnow truth from lies? And this is really a subjective rather than an objective question – it’s also the key to understanding the scope of what the F.T.C is trying to accomplish.

From my understanding; the F.T.C  doesn’t expect that every blogger who gets a freebie meal once a year and writes a favorable review about a restaurant should even disclose anything; but lets say that you’re a renowned food critic who regularly writes reviews in your blog; then the F.T.C expects you to buy into the gold standard of full disclosure – so the skeleton key to understanding this whole idea of full disclosure really revolves around the question of credibility i.e do you hold yourself out as a subject matter expert? How much sway do you have over your audience? What is the size of your readership?

Ultimately, the question will be both a matter of qualitative and quantitative reasoning.

Since the government keeps claiming that there is only lies and disinformation in the internet; this should prompt us all to ask; then what’s the basis to even demand blogs to fully disclose their association with firms should they decide to write favorably or negatively about products or services? This doesn’t make any sense to me.

Darkness: let me get it clear; in you last statement – you said the law doesn’t expect ordinary bloggers to fully disclose – so what you seem to be saying is not even the F.T.C expects ordinary bloggers to fully disclose their association with firms?

Dotty: Yes. 99.9% of bloggers in the US will not be subject to this F.T.C guideline; I dont see MDA departing from this benchmark; if they do, it will be pretty hard to justify– and it’s very clear when one goes through the specific examples that is provided in the 81 page report that, that’s actually the case.

But Darkness you know and I know that people don’t process information in that manner. What they see is the big stick of the $11,000 fine and they draw the simple conclusion that if they cross the mythical line, it’s going to come down on them.

The law doesn’t work that way; you will be surprise; how precise it really is.

Q: When you say the F.T.C guideline is very precise on this point of full disclosure, can you give us an example.

A: I don’t have too. The F.T.C actually provides an example by way of a case study in this 81 page report where it defines the term “material connection.” This is important because if you are going to fine someone $11,000 you need to establish this burden of proof.

And here its stated very clearly: “The blogger has primary responsibility for disclosing that he received the video game system for free, the manufacturer has an obligation to advise the blogger at the time it provides the gaming system that he should make the disclosure in any positive reviews of the system.”

The key phrase here is “the manufacturer has an obligation to advise the blogger.”

The question here is if the onus is entirely on the blogger to disclose; then why should the manufacturer even need to advise the blogger to do so?

Unless of course the F.T.C places the onus of full disclosure on the manufacturer or service provider and not the blogger – and if that is really the case then how can the blogger even be held solely accountable for his actions?

They law is very clear here and the spirit and intendment is even clearer – as what the F.T.C is trying to do is to ensure firms and not bloggers don’t misuse the new media platform.

Q: How sure are you that the F.T.C guideline doesn’t target individual bloggers?

A: On the balance of probability; I would say 100%. Because if the F.T.C is going to direct the process to go after individual bloggers; first of all that would be very impractical.

Secondly, it will just takes them down a very nasty road that is bristling with broader issues concerning free speech, first amendment rights, right to privacy etc. And it’s even arguable whether that’s constitutionally kosher. I don’t see the F.T.C going down that road with individual bloggers – I don’t discount it may go after entities who may be using blogging as a medium to communicate with their target market and other firms who may fashion themselves under the broader umbrella of dot.com firms. But I am very confident that they will not go after individual bloggers who may not even see the need to register a company, as that will really complicate the proceedings considerably.

Whereas if the F.T.C  decides to hold firms responsible that simplifies proceedings immeasurably and side skirts many of the thorny issues – I think what you need to understand is not only does the law need to conform to certain structural norms imposed by legal text, precedent and doctrine; but more importantly, it also needs to be enforceable.

Q: You mentioned there are thorny issues that the F.T.C will have to contend with; can you share with us all what they may be?

A: Certainly – the world isn’t as gullible as it used to be – following 9/11 it was possible to rubber stamp all sorts of nonsense ranging from arrest without trial to unmitigated torture, all in the name of the war against terror. These days all those things which were once considered acceptable moral accommodations are now so abhorrent and reprehensible that they are being dismantled even as we speak – and the case for vigilance against encroachment of elemental rights is considerably sharpened by this new attitude – one not only sees this in law journals; but it has also come to color much of discourse in academia and in industry – and if you really take the trouble to look around a lot of noise isn’t emerging from the lunatic fringe; they are really coming out from very intelligent enclaves where people are demanding congruence and moral accountability – they don’t have anything against the idea of protecting consumers; but they certainly don’t wish to see the ambit of the law encroaching upon their rights to privacy and freedom of speech; neither is it reasonable not to expect people to wonder why if blogs should be subject to this guideline of full disclosure; then why aren’t other streams of media subjected to the same criteria of conformance? Maybe we should demand the same of political parties; governments; newspapers; television; radio and the entertainment industry etc.

From what I see this is really the fly in the ointment – many people dont understand why the F.T.C is picking on bloggers – t’s an area that is bristling with contrarian views and it’s fair to say; it may be some time before we can really see the final form of what the F.T.C can roll out?

Q: “The F.T.C can roll out?” You speak as if they don’t have the final say?

A: They dont. And they know it. Not when you consider how so much of trade and commerce has already migrated online – business realities will definitely weigh in to shape the final form of the guideline – its fair to say following the 1st December roll out of the guideline what we will see is something very close to the first run of electric cars and waterproof mascara’s – it’s very very early days – if the F.T.C was really that confident of enforceability – the words, “rarely” – “sparingly” – “case by case” – “in the event…”  would not have featured some 50 times in the 81 page report – instead it would have read like something straight out from the Magna Carta, where every passage would begin with the prefix “anno domini.”

In legal parlance, when a document provisions so much “if’s” and “maybe’s” that can only really mean one thing – the F.T.C are wary of painting themselves into a corner and one way of hedging against this possibility is by provisioning lotsa of discreationary powers.

Paradoxically, that may be why so many people find the F.T.C guidelines so intimidating – as it really covers a very big geography that touches of every aspect of life.

Q; Just a final question Dotty; you know the people in wayangparty are quite nervous by this development – do you think, the MDA ruling will work against them?

A: Really I don’t see why that should be Darkness. We’ve all being told time and again: there is nothing but lies and disinformation in the internet. Invoking the law may just break that magic spell – why should anyone do such a silly thing?

Really dont be so ridiculous.

Dedicated to you Darkness. You try too hard.

The Brotherhood Press 2009

This conversation between Missy Dotty (kind owner of this site who has kindly allowed us to invade her) and Darkness of the brotherhood / has been recorded by both JDAM and Y2K (director general of the Free Internet Library Board – FILB) – Please kindly transact  in Standard Imperium Only within the allocated free zone provided / all clearing houses in Singapore will shut down with immideate effect @ 1730 GMT – 29-10-09 /  Pls help us to relay this message to our allies and channel partners to do the same / we will be diverting traffic to facilitate communication – you may not be able to access the gaming network– as we have all been given strict instructions not to disclose anything here or elsewhere / published in Ekunaba / SLF 1 to 8 (our new Malaysian Portal) / Phi Beta Kappa / Strangelands / Ikiran / Just Stuff/  Siyuran (New Japanese Portal) / Confederation. – The Brotherhood Press 2009 – This interview carries a E-prom codex to facilitate your navigation – 982398- Doberman.