Food Writers and the Federal Trade Commission

[Scott--DFW]

If you write about food on the Internet--whether as a professional, a freelancer, a blogger, or a message board participant--you ought to read the FTC's recently revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising." You may not think these official administrative interpretations of the Federal Trade Commission Act impact you, but you might be surprised at how broadly they're drafted.

Rely on your own reading (or preferably your lawyer's reading), of course, but perhaps the most significant point, from a writer's perspective, relates to disclosure of "material connections" (16 C.F.R. 255.5).

Those who write about food on the Internet (as a pro, freelancer, blogger, or message board participant) are required to disclose any "material connections" with the seller of the product. A material connection is one "that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience)."

The standard in the definition and in the examples relates to audience expectations--not the writer's personal opinion or even whether the writer was actually influenced by the connection.

Material connections can come in many forms: payments, comps (i.e., complimentary food, drinks, travel, etc.), or even relationships (e.g., friends, lovers, employees, investors, etc.). (Example 8 in Section 255.5 specifically targets shills on online message boards.) The Guides don't prohibit anyone with such material connections from writing about the product; they just require full disclosure of the connections.

In nearly every case, a professional writer, freelancer, blogger, or message board participant who accepts comps (food, wine, whatever) from a food-related business must disclose them. Similarly, in nearly every case, a professional writer, freelancer, blogger, or message board participant who writes about a food-related business with which they have a credibility-impacting relationship (in the eyes of a reasonable audience member) must fully disclose the relationship. Failure to do so is not a minor ethical faux pas, but a potential violation of the Federal Trade Commission Act.

While that's all good in principle, it's likely that many unscrupulous writers will simply ignore the law. It's up to readers--as it has been previously--to be vigilant about such material connections. In the past, some writers might have ignored questions about whether they have a special relationship with or have taken freebies from a business owner. That's unacceptable now and readers should cry foul if a writer gets evasive.

Scott

PS While the focus of this post and much of the discussion has involved "online" media, the same rules apply for print media. [Edit: The Italian Wine Guy linked to an item about wine blogging that referenced a recent interview with FTC staffer Richard Cleland who seemed to imply that traditional print media aren't covered by the revised guidelines. That's not clear from the guidelines themselves, which--as far as I can tell--do not exclude traditional print media, whether under the definition of an "endorser" or anywhere else.]

[Kirk]

While the new rules appear to be at once stringent and poorly constructed, I am not sure they are all bad. I certainly find it better than a stringent and poorly constructed "self-regulatory" scheme like the one promoted by some Los Angeles "professionals" several months ago.

If a "critic" or "promoter" is being paid by a business for coverage; getting comped meals or other compensation in exchange for coverage; or is promoting, slamming or defending a business or cause because of a commercial, personal or amorous relationship, then I think it is fair to require disclosure of the arrangement/relationship.

Certainly, shills, sock puppets, paid defenders, etc., should disclose their relationships and positions from the beginning.

There have been similar requirements in the world of finance and investments since at least 1933/1934, and those requirements were upped and reinforced in the early 2000s. (Read a "safe harbor" statement in any financial news release or the "relationships and conflicts of interest" sections of any 10K or proxy statement, if you want to see how arcane and labyrinthine these disclosures have become.) Those requirements don't stop abuses, but periodic high-profile perp walks and prosecutions arguably do dissuade some of the worst infractions. It's fair to say that if the requirements didn't exist, the level of disclosure and honesty in the financial markets would likely be far worse.

What does concern me about the new FTC standards is the reliance on "the audience" as the standard by which fair disclosure will be judged. There have been visible instances in the past where this standard has not worked at all.

Safe Stomach disclosure:

In the past 12 months, I have paid for all of my own restaurant meals except for a couple where a friend or family member has picked up the tab; none of these friends or family members owns or is an investor in any of said restaurants. To the best of my knowledge, I have not received any free courses, amuse bouches, beverages or other "comps" at any restaurant, and certainly not in quid pro quo exchange for favorable coverage, or withholding unfavorable coverage, of the meal or restaurant on any food blog or message board. Notwithstanding the former, I have received discounts of up to 50% of the retail price of my meal, on fewer that 10 occasions, when dining in two restaurants where one or more of my children were employed as servers; said discounts were generally wiped out by the generous service compensation ("tips") required to keep my issue happy. So leave me alone, Mr. FTC Man, OK?

[Scott--DFW]

Over on SideDish, Nancy Nichols has written about the revised guides. She closes her post with the following:

But here is one rub--I’ve already heard that some bloggers and indie food writers are finding ways to get around the rules by posting one small disclaimer somewhere on their webpage and not in the copy of the item....

That kind of behavior is proof (if any was needed) that slime will be slime. However, as I see it, it isn't a "way to get around the rules." It's a violation of them.

The standard of disclosure--repeated fifteen times throughout the guidelines, nearly half of them in the critical "Disclosure of Material Connections" section (i.e., 255.5)--is "clearly and conspicuously." A buried disclosure of the type Nichols describes cannot, by definition, be "clear and conspicuous." In fact, it shows both knowledge of the requirement to disclose material connections and an intent to circumvent it, which is doubly slimy. Any "blogger or indie food writer" who does that loses a lot of credibility, in my book (if s/he had any to start with).

I hope Nancy will name names of those who are trying to pull the wool over their readers' eyes in this way.

Scott

[Kirk]

Has Nancy started following the new rule yet?

[nickloubuc]

My t-shirt today reads: "Clear and Conspicuous!"
The “rule” doesn’t start until December 1st. I’m not naming names until they break the rules, but two food/wine bloggers have told me “all you have to do is have a disclosure somewhere on your website that says you accept complimentary meals, etc.” Like I said in my post, we have sent the FTC guidelines to our lawyer to clarify what “clearly and conspicuously” means to the magazine and to the blog. And Kirk, I am finishing off a free red velvet Sprinkles cupcake as I type this. Then I will get in the Audi they gave me for hosting the SupperClub and head over the hill to Bailey’s Prime Plus for a free steak. (hint of guilty buried in post) See ya there!

[Kirk]

I assure you that you won't see me eating a free cupcake, driving an Audi or eating at Bailey's Prime Anything.

[luniz]

A farmer once gave me three free peppers, and another gave me a dollar off some zucchinis. phew I'm glad I got that off my chest.

[BK]

A farmer once gave me three free peppers, and another gave me a dollar off some zucchinis. phew I'm glad I got that off my chest.

Don't forget about the free "John Galt endorses Hatch Peppers" poster you got at the tea party last July 4th.

I assure you that you won't see me eating a free cupcake, driving an Audi or eating at Bailey's Prime Anything.

Hey, it's really crowded in that line, isn't it?!

[Scott--DFW]

A farmer once gave me three free peppers, and another gave me a dollar off some zucchinis. phew I'm glad I got that off my chest.

I'm not sure what to read in your sarcasm, Luniz. That you don't believe any writers are influenced by "material connections"? That writers may be influenced by "material connections," but the government should not intervene? If the latter, should the government not intervene as a matter of general principle or because government intervention is likely to aggravate the problem or create new problems?

Scott

[luniz]

A farmer once gave me three free peppers, and another gave me a dollar off some zucchinis. phew I'm glad I got that off my chest.

I'm not sure what to read in your sarcasm, Luniz. That you don't believe any writers are influenced by "material connections"? That writers may be influenced by "material connections," but the government should not intervene? If the latter, should the government not intervene as a matter of general principle or because government intervention is likely to aggravate the problem or create new problems?

Scott

Certainly they can be influenced. But even if they are, so what? They're not necessarily claiming to be impartial are they? How come ads on TV don't need disclaimers that the "actors" are paid? Is the FTC going to be reading reviews on Facebook and DallasFood, fining people who violate it's rules? If so, how do I get that job?

I'm no libertarian, it's pure fantasy that life is rosy without government. But there has to be a cut off point on what government needs to do and what it doesn't and other than constitutional issues, that decision has to be made by the people. And I've never noticed anybody clamoring to have the FTC censoring food blogs. What exactly is the point of the point of issuing unenforceable guidelines? It will give stupid people the impression that bloggers aren't on the take when people should be skeptical and can be used to harass people based on personal motivations when somebody forgets to mention that they got free chips and salsa at a tex mex restaurant.

[Scott--DFW]

Certainly they can be influenced. But even if they are, so what? They're not necessarily claiming to be impartial are they?

It's not a matter of what a writer "claims," but about how audience members view the writer. Some writers are seen as independent and honest. Some are seen as uncritical promoters of friends, comp providers, or whomever. Some may be seen as independent and honest, but are in fact uncritical promoters of friends, comp providers, or whomever. Sometimes you can tell that last group by the tone and content of their writing (often fawning, in step with broader PR campaigns, showing signs of special access or treatment, etc.); but sometimes you can't (because some writers are simply upbeat folks who've never had a meal they didn't like). The "so what" is that, in the absence of disclosure, readers may mistake disguised advertisements for independent commentary. Leaving aside the merits of the FTC guidelines, don't you think greater transparency about relationships between advertisers and endorsers would be helpful to you as a consumer of information?

How come ads on TV don't need disclaimers that the "actors" are paid?

Because a reasonable audience member assumes that an actor in a television ad is being paid. There are many circumstances where a television ad would require a disclaimer, some of which are detailed in the FTC guidelines we're discussing. (Read the examples in Sections 255.0, 255.1, 255.2, 255.3, and 255.5. None of those seem to me to be controversial.) Audience assumptions are different with message boards and blogs, the utility of which depends in large measure on the content reflecting the honest opinions of independent writers. (Once confidence in the independence of the writers breaks down, what's the point of reading?)

Is the FTC going to be reading reviews on Facebook and DallasFood, fining people who violate it's rules?

In several interviews over the past couple of weeks, FTC staffer Richard Cleland has said they have no intention of doing that. Their enforcement efforts will be directed primarily towards advertisers (rather than the endorsers who serve as their pawns).

But there has to be a cut off point on what government needs to do and what it doesn't and other than constitutional issues, that decision has to be made by the people. And I've never noticed anybody clamoring to have the FTC censoring food blogs. What exactly is the point of the point of issuing unenforceable guidelines?

This isn't new law. The guidelines are interpretations of existing law governing advertisers, necessary to accommodate new media forms (that advertisers are aware of and exploiting to their advantage). The law is enforceable, though there will probably be some challenges to the interpretations in these guidelines. The point is to protect consumers.

It will give stupid people the impression that bloggers aren't on the take when people should be skeptical and can be used to harass people based on personal motivations when somebody forgets to mention that they got free chips and salsa at a tex mex restaurant.

Again, I think you mistake the goals and limits on the FTC guidelines. There won't be any significant harassment of individual bloggers (and certainly not over free chips and salsa which--again, based on reasonable audience expectation--would not require disclosure). The objective is to make it more difficult for advertisers to buy endorsements through new media and social media. It's easier and more effective to go after a company that's distributing free products to bloggers in exchange for reviews than it is go after the thousands of bloggers on the take. The advertisers are the ones that have greater cause for concern.

Scott

[luniz]

well that is a pretty good response, you've obviously thought it through a lot more than I have.

Once confidence in the independence of the writers breaks down, what's the point of reading?

It's an odd mixture of masochism, love of reading, and sheer boredom.

[carter]

The point is to protect consumers.

Protect consumers from what? As a consumer, what is my downside? That I try a restaurant based on someone else's opinion and am ultimately disappointed? That doesn't seem too devastating (or even unusual) to me.

Count me in the crowd that believes the regime, if properly enforced (it won't be), will do more harm than good.

[Scott--DFW]

Protect consumers from what? As a consumer, what is my downside? That I try a restaurant based on someone else's opinion and am ultimately disappointed? That doesn't seem too devastating (or even unusual) to me.

The downside is that you'd be trying a restaurant (i.e., spending your time and money) on the basis of what you believed was the honest opinion of an independent, reasonably impartial writer, but was actually that of the restaurant's owner using a pseudonym, the chef's girlfriend, a starving college student who was offered a free meal, booze, and face time with the celebrity chef in exchange for blogging about it, or the restaurant's PR representative. You'd be falling for an advertisement masquerading as independent opinion.

Scott

[BK]

The point is to protect consumers.

Protect consumers from what? As a consumer, what is my downside? That I try a restaurant based on someone else's opinion and am ultimately disappointed? That doesn't seem too devastating (or even unusual) to me.

The point is that you would be trying out the place based upon a shill's opinion. Now, you may think that's OK and like to waste your time and money that way. So be it.

Others have better use for both their time and money, as well as a basic belief that when they read a recommendation for a place, it's honest and forthright and based upon facts, not comp'ed food.