Home > Regulation > An FTC decision on Endorsements is Reverb-ing with Me…

An FTC decision on Endorsements is Reverb-ing with Me…

I know, it’s been ages since I last posted to the Balancing Act.  It’s not been a question of just time; it’s also been a question of whether it was permissible to write about certain subjects under the FTC’s recently revised Endorsement Guides. Which is why I’ve been putting some thought into how the Endorsement Guides actually work in practice when it comes to blogging about a topic that your client – or your clients’ client – may have an interest in.

Late last month, I was helped along in my thinking by the FTC’s first administrative decision under the revised Endorsement Guides – against Reverb Communications. Reverb is a company with a niche practice – they provide marketing and PR for video game companies who develop for the iPhone platform.  According to the FTC’s complaint, Reverb’s fee often included a percentage of the sales of its clients’ gaming apps, giving Reverb added incentive to boost those sales in the iTunes Music Store.  Reverb’s enterprising owner, Tracie Snitker, along with other Reverb employees, became regular visitors to the comments section of the iTunes Store.  Posing as customers, they posted positive comments about their clients’ products to encourage their sale

Although the Reverb comments were mostly generic and unimaginative (“One of the Best,” “Really Cool Game”), they managed to attract the FTC’s attention.  One wonders if the vigilant Apple, patrolling the iTunes store for other violations, helped the investigation along here… But back to Reverb.  Of course, the Commission found against this kind of practice, stating that endorsers must disclose any “material connection” i.e. “any relationship that materially affects the weight or credibility of any endorsement and would not be reasonably expected by consumers.”  And when it comes to secondary liability, the Commission reminds us that under the Endorsement Guides, “someone who receives cash or in-kind payment to review a product or service, should disclose the material connection the reviewer shares with the seller of the product or service.  This applies to employees of both the seller and the seller’s advertising agency.”

Applying Reverb to this blog, I realize that it’s becoming harder to identify which areas I can and can’t write about.  Many of the issues I want to blog on are also issues of paramount importance to my clients – and in some cases, their clients.  The collective policy interests of these companies pretty much engulf the universe of issues that I’ve been writing about in the Balancing Act.  Recently for instance, I wanted to write about a Third Circuit case that found no reasonable expectation of privacy in certain kinds of geo-location data (this was in the context of a government request, under ECPA).  I realized however that if I did so, then I would need to also disclose my material connections to certain clients, particularly those developing location-based apps and services, for whom the treatment of geo-location data – especially by the courts – is a very important issue.  I didn’t want to do this, especially some of these projects are still under development and a trade secret.

All of this must add up to one conclusion – I’ve decided to discontinue the Balancing Act – at least in the analytical, longer post format that I’ve been maintaining for over a year now. If you’ll forgive the pun, Reverb is a decision that’s “reverb”erating with me – especially when it comes to this blog.

Thanks for taking the time to read the Balancing Act during the past year; thanks also for the comments on specific posts.  I have learned so much from this experience – not just in terms of the substance, but also in observing, firsthand, how blogging and other web technologies are transforming how we read and get news.

As the ancient Greek orator Demosthenes once said, “small opportunities are often the beginning of great enterprises.” This could also be said of the many blogs and websites that populate the Internet today.  Web technologies – on your computer, phone or other wireless devices – are ushering in a revolution that will change the human experience forever.  Just look at the potential impact of web technologies in the publishing industry alone – resulting access to more analysis, news and other content than ever before.  The last time we had a revolution of this magnitude – one that shook society at its core – was when Guttenberg invented the printing press.  As a result of having access to the printed word, literacy rates rose and people began to read and form opinions for themselves.  The Enlightenment and Reformation followed, and the rest was history.

I think the Web has the potential to be at least as significant as the printing press, if not more.  So this is definitely a story that is “to be continued.” I’ll continue to enjoy observing the Web’s evolution across multiple platforms (desktop, mobile), as well as all of the attendant issues that will necessarily crop up when government seeks to restrain that evolution in the interest of public policy.  And I still plan to blog – especially on other blogs – and will cross-post to the Balancing Act.  You should see me posting on the ABA’s Secure Times blog in the near future (I recently was appointed a Vice Chair of the ABA’s Privacy & Data Security Committee for the 2010-2011 year).

So I’m sure I’ll see you out there – especially if you follow these issues on a regular basis.  Again, thanks for taking the time to read the Balancing Act.

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