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Social Media Makes It Easy To Blog Or Tweet Your Way Into FTC Fines

January 31st, 2013

But that is so 2009. Since then, many new ways have sprung up for retailers to interact with consumers or potential consumers. Apps enable sharing of information. Twitter enables people and companies to exchange information and ideas. Not to mention photo- and video-sharing Web sites and, yes, even food porn. Companies share information not only through their Web sites, their marketing materials, their advertising and their social media marketing but even through the Facebook postings of their employees.

This creates a legal and regulatory thicket for them to navigate. If an employee of a company posts a rave review of a company product without disclosing his employment status, is this “deceptive”? If he or she simply “likes” the endorsement of someone else, or reposts a rave review by someone else, again without disclosing the affiliation, does this violate the FTC regulation? What about so-called independent rating services—Angie’s List, Yelp or others—that allow comments to be posted? They have the potential of being abused by both consumers and retailers.

And finally, what about entities like Reputation Defender that use tools like Google hacking to lower the page ranking of “bad” pages or bad reviews and to raise the page ranking of “good” pages or good reviews? If effective, these programs can present to the consuming public an inaccurate—or at least an incomplete—picture of the value of a good or service.

Of course, the answer is “be reasonable.” The devil is in the details.

The law will allow a great deal of latitude in online and social media marketing. The touchstone is whether, taken as a whole, the advertising is “fraudulent or deceptive.”

Take food porn. The reason, presumably, that Foodspotting is worth $10 million is because people using it believe it to be a place to get unbiased, unstaged and candid images of restaurant food (although The New York Times reported on one restaurant that permitted consumers to photograph their meals, but only in the kitchen, telling the consumers, “Wouldn’t that look better on a marble surface?”).

If Foodspotting is co-opted by the restaurants themselves, who post unrepresentative and staged pictures, not only is the Foodspotting brand diminished, but the activities might be seen as fraudulent and deceptive.

The area of regulation is in flux, as is the technology. So just ask yourself: If I was consuming this media, would I think of it as deceptive? There are no easy answers, and that’s what keeps lawyers in business. And remember, leave the gun. Take the cannoli.

If you disagree with me, I’ll see you in court, buddy. If you agree with me, however, I would love to hear from you.


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