A Mythical License to Blog

My friends at Philly Startup Leaders were burning up cyberspace last week with passionate posts to the listserv about an item that recently got picked up by blogs and conservative newspapers around the nation, as well as by the Philadelphia Inquirer. It seems that the city has contacted a number of Philly-based bloggers who reported marginal advertising income from their blogs on their federal income tax returns (we’re talking under $100 per year, folks, not the Huffington Post) to demand that they buy business privilege licenses and pay business (gross receipts and net income) taxes.

The licenses, which grant you the privilege to operate a business in the city and pay business privilege taxes (BPT), cost $300 (for a lifetime license) or $50/year. Since you need a city account number to pay BPT, and you can’t get one without a business privilege license, the city hits you twice, and you’re essentially buying the right to pay BPT (unlike in other cities which generously comp you the right to pay business taxes). Furthermore, as Councilman Bill Green acknowledged in a post to the PSL listserv, Philadelphia frequently doesn’t inform you of the $50/year option.

This was the most revealing part of Green’s post, most of which was a canned plug for a tax reform proposal put forward by him and Councilwoman Maria Quinones Sanchez, which they claim will favor Philly-based businesses over those headquartered outside the city by raising the threshold for payment of BPT, eliminating the net income portion of the tax and raising the level of the gross receipts component. (Mayor Nutter is studying the proposal.)

For me, the PSL discussion highlighted several core issues. First, let me be clear: legally, there is no new “blogger tax” or “blogger license.” You do NOT need a license to write a blog in Philadelphia, only to earn money from one. Our cash-strapped city simply applied existing business regulations in a ham-fisted manner, giving itself (as it often does) a very public black eye. (The same goes for Philadelphia’s Eliot Ness-style war on cupcake trucks.) Until PSL took up the issue, nobody seems to have thought much about whether bloggers are businesses or creative hobbyists, and what differentiates the two. (According to Councilman Green, the city is considering adopting an IRS-style test.)

Shaking down bloggers, confiscating cupcake trucks, and grabbing revenue from wherever it can are prime examples of the functioning of our Uncreative Economy, a closed world of special-interest groups, bureaucrats, politicos and tired and dwindling old industries. Is it any wonder that we are widely perceived as boorish and uncreative, not to mention hostile to business and entrepreneurship? Are you surprised that the intellectual capital nurtured at Penn, Drexel and Temple flees to New York, Austin, Boston and Silicon Valley and that the hallmark of a homegrown company’s success is leaving Philadelphia?

Unserious Entrepreneurs and Why It’s Better to Have Money Than to Not

A few of my fellow PSLers made two other points which I want to address. First, entrepreneurs derive real quality-of-life and economic benefits from having easy access to the thrumming social, cultural, intellectual and aesthetic infrastructure that is Philadelphia. Short commutes, the ability to ride the No. 48 bus to work (as I do every day), Buddakan being immediately downstairs from my office in Constitution Plaza, access to the creative and entrepreneurial ferment of Wharton, proximity to New York and D.C. without the astronomically high rents — aren’t these things worth $300 or $50/year?

Of course they are. But we’re already paying business taxes, among the highest in the nation, for these benefits. Hitting up entrepreneurs – or worse, hobbyists trying to eke out a few extra shekels in the midst of the worst downturn since the 1930’s — for an additional fee for the privilege of paying business taxes is clueless and disdainful.

Some PSLers also contended that $300 is not a lot of money, and that anyone unwilling to shell out such a nominal sum isn’t really serious about entrepreneurship and shouldn’t be in business in the first place. This is dead wrong, in my view. For one thing, it puts the aficionado who writes an opera blog out of sheer love for the art form and uses Google AdSense for aperitif money in the same category as Comcast or a rapid-growth tech startup that has just closed $20 million in venture financing.

Secondly, $300 is a lot of scratch even for a genuinely forward-looking startup. My clients fund their initial roll-outs from work income, severance and/or savings. In the evolving media space which is my professional ether, what puddles of funding exist must go toward development of the alpha and beta sites, branding, incorporation costs — and legal fees. Speaking of incorporation costs, I recently set a client up with a cheap Delaware registered agent ($99/year) rather than the standard national corporate service companies, who typically charge $275-$325 per year. The difference, $200 per year give or take, was significant to him.

This particular client told me he was sleeping on a friend’s floor to save money while the company was being set up. He is an extremely intelligent and focused entrepreneur with a nimble mind. You will not hear me call him a dilettante for wanting to save $200. That’s three or four hours of developer time, or an Amtrak ticket to attend an angel meeting.

Gargling Creative Capital

It is a privilege to build a business in Philadelphia. That’s why my office window looks out on the site of Ben Franklin’s house and I have woven (or my designer has) the street grid of Center City into my firm logo. A privilege, however, is not the same as a necessity. Nor is managing decline the same as leading. If the city doesn’t stop gargling its creative capital, those talented men and women will grab the first cupcake truck out of here.

Yes, you heard that correctly. In the last few months, the federal government has brought indictments against several individuals under a 1986 anti-hacking statute, the Computer Fraud and Abuse Act (the “CFAA”), for engaging in otherwise legal online behavior that nevertheless violated website terms of use. The CFAA (18 U.S.C. §1030) imposes criminal and civil sanctions for access to a protected computer without authorization or exceeding the scope of authorization. The theory used by government prosecutors and private litigants is that the do’s and don’ts spelled out in website terms of use define the scope and limitations of permitted access. Any behavior contrary to such terms, then, renders the site access illegal. In the most common application of this theory, an action is brought against a data aggregator or other person for using bots (automated software programs) to access a public website whose terms of use prohibit access through “automated means.”

Cops Armed with Website Terms

Even apart from the argument that the CFAA was never intended to prevent non-invasive access to public websites, the EFF highlights another problem with this theory: it delegates to private website owners the ability to define what is and is not criminal behavior. As a Internet lawyer who has both written and reviewed many website terms of use and privacy policies over the years, I can appreciate the EFF’s concern that they are rife with arbitrary and one-sided clauses.

In United States v. Lowson, federal prosecutors brought an action in New Jersey against the operators of Wiseguys Tickets, Inc., which used bots to buy concert tickets on the Ticketmaster.com website for resale, contrary to the site terms of use which prohibited access by automated means. Although scalping is not illegal in New Jersey, the government justified its action by a supposed need to protect consumer access to tickets. The EFF has filed an amicus curiae (friend of the court) brief on behalf of the defendants in this case.

In United States v. Drew, the feds indicted a woman who created a false profile on MySpace and used it to communicate with a teenager, who later committed suicide. The EFF similarly filed an amicus brief for the defense, and the indictment was ultimately dismissed.

Facebook is using a similar theory in a civil suit against a company called Power Ventures. Power Ventures provides an add-on that enables Facebook users to aggregate their data over several social media sites. Facebook is alleging that Power Ventures violated California criminal law because the add-on utilizes a bot (in violation of the Facebook terms of use) to retrieve user data. (Never mind, as the EFF has wryly observed, that the bot is being deployed at the user’s initiative to obtain his or her own data.)

Confusion in the Law

I’ve been following these cybertrespass case for years, and on a number of occasions I’ve counseled data aggregators using bots and other aggregation tools to harvest factual and similar uncopyrightable data from publicly accessible websites. It’s an exceedingly common practice, part of the landscape of the Internet that we are coming to take for granted. Unfortunately, the law hasn’t kept pace with technological evolution and business practices. The authorities are conflicted, and while some cases set a high standard for proving damage or loss in common-law computer trespass and CFAA actions based on violation of website terms (for example, a substantial slowdown of the web server or exclusion of other users due to tens of thousands of pings from bots over a short period of time), other courts have left the door wide open for suits.

As the EFF has observed, the defendants in these cybertrespass cases (scalpers, an unfriendly adult tormenting a teenager online, a etc.) are not terribly sympathetic. In the first rash of civil cases in the early 2000’s, the defendant was generally a competitor of the plaintiff which used to bots to copy factual data (such as movie times) from the plaintiff’s site. On some level this may seem unfair, since a website operator makes an investment in time and resources to assemble and publish the information in the first place. On the other hand, where the copyright law does not grant protection in publicly available content, the purpose of the law is circumvented by engineering some other legal cause of action effectively to prevent the copying and republishing of this content. (Copyright protects creative expression, and raw factual data by itself lacks even the minimal creative quotient needed for copyright. The fact that it may be difficult to assemble is legally irrelevant.)

Finding a Balance

The bringing of criminal prosecutions for violating public website terms of use takes the confusion in the law to a frightening new level. Even if courts ultimately dismiss the indictments (as happened in the Drew case), the threat of prosecution can be expected to deter competition and chill the beneficial use of data aggregation tools to enable the free access and management of data on the Internet, including users’ own data. Furthermore, as the EFF has noted, innocent parties who do not read or do not understand the terms of use of the sites they are accessing may be caught in the cybertrespass dragnet.

While the use of bots to access and harvest data from protected areas of sites (such as third parties’ personal profiles designated as private and shielded by privacy settings) should be actionable and treated as a criminal offense under the CFAA, website operators should not look to the government to police users on the public areas of their sites. Rather, let them be responsible for enforcing their own terms of use under breach of contract law and provide evidence of actual, quantifiable damages from user access they don’t like.

The facts of the case are very simple. Brelyn Hammernick was a Minneapolis technical recruiter for the IT services firm TEKsystems who left to take a job with their competitor Horizontal Integrations. Ms. Hammernick used LinkedIn’s e-mail tool to communicate with her network, which included several current TEKsystems employees. Ms. Hammernick had signed a non-compete agreement with TEKsystems containing standard non-solicitation language that prohibited her from communicating with company employees to induce them to leave TEKsystems or work for a competitor. Yet, as several attorney bloggers have already commented, certain of Ms. Hammernick’s e-mails were clearly solicitations. The relevant paragraph from TEKsystems’ complaint alleges:

“Hammernick is soliciting TEKsystems’ Contract Employees and clients in the geographic area encompassed by the non-competition and non-solicitation provisions of the Hammernick Agreement. For example, Hammernick has communicated with at least 20 of TEKsystems’ Contract Employees using such electronic networking systems as “Linkedin.” Hammernick has, at a minimum, “connected” with the following TEKsystems’ employees through “Linkedin: Harold Osmundson, Steve Wicks, Kazim Merchant, Shawn Faber, Srujana Pasunuri, Shailaja Garishakurti, Kevin Jordahl, Mitha KC, Carl Boudreau, Tom Peterson, Seann Van Cleve, Bob Hasselman, Marcia Diterich, Bill Severson, Claude Wallander, and Brett Snaza. In her contacts with Tom Peterson, Hammernick asked Peterson if he was “still looking for opportunities.” She then stated that she ‘would love to have [you] come visit my new office and hear about some of the stuff we are working on.’”

You can also find a full reprint of the key e-mails, along with some trenchant commentary, on Dallas attorney Rob Radcliff’s blog here. (I don’t normally cite other law firms’ blogs, but I consider Mr. Radcliff’s post both informative and dead-on.)

What are the take-aways here?

1. No one seriously believes that the federal district court is going to treat LinkedIn communications as qualitatively different from traditional channels of solicitation, such as telephone calls, e-mails outside of the social media context, or in-person conversations. Doing something dumb on Web 2.0 is the same as doing something dumb on Web 1.0, which in turn is the same as doing something dumb using a telephone, telegraph or smoke signals.

2. As Mr. Radcliff notes in his blog, employers may find social media posts and communications of departed employees to be a font of useful evidence in employment-related litigation. Employers should also consider mentioning social media posts and communications as a specific example in employee agreements and materials prohibiting solicitation and other objectionable activities.

3. The TEKsystems case involves deliberate one-to-one communications through LinkedIn. A salient question, however, is whether posts or updates to one’s entire network or chosen group can violate non-solicitation obligations if the content is objectionable and certain recipients are still employees of the sender’s late, unlamented employer. Or, to put it differently, if you’ve signed a non-compete with non-solicit requirements, should you “un-friend” or “de-link” your former work colleagues? Simply updating your career profile should not be a problem, but you may want to think twice before blitzing your network or friends about all of the terrific opportunities you’re getting at your new employer.

4. Careless chatter on social media is a problem not only for departing employees, but also for their new employers, who (like Horizon Integrations in the TEKsystems case) may get named in the lawsuit if the objectionable behavior appears to work for their benefit.

Legally speaking, social media is no different from other forms of communication. However, just as e-mail did in the 1990’s, it has a tendency to invite informal, spontaneous and poorly considered actions from its users. Given the uncertain state of privacy on Facebook and other popular social media sites, expect to see a mountain of social media evidence building up in future litigation.

The facts of Stengart are simple. Ms. Stengart brought an employment discrimination suit against her home-nursing company employer, Loving Care (great name, that) and exchanged e-mails with her attorney through a web-based personal Yahoo account that she accessed from a company-issued laptop. In the course of the discovery process the employer’s counsel imaged the laptop’s hard drive and found the e-mails, but did not promptly notify Ms. Stengart’s counsel and turn over the e-mails, as required by New Jersey’s attorney ethics rules. Although the employer purportedly maintained an Internet use policy that indicated “e-mail” and Internet use was the company’s property and could be monitored, the policy was poorly drafted and internally inconsistent, stating at the same time that occasional personal use of work computers was permitted.

The New Jersey Supreme Court held that, given the lack of clarity in the policy that appeared to invite some personal activity, and the fact that the policy did not refer specifically to employer monitoring of password-protected, web-based e-mail usage, Ms. Stengart had not been adequately placed on notice of her employer’s claimed right to monitor. Therefore, under the New Jersey constitutional and common law of privacy, she retained an objectively and subjectively reasonable expectation of privacy in her Yahoo account (i.e., that it fell outside the scope of the monitoring described in the Internet use policy), which Loving Care violated when its lawyers retrieved her private e-mails. Furthermore, the Court held — and this is the kicker — even if the employer’s policy had been totally clear that her Yahoo account usage could be monitored, it would not be enforceable to destroy Ms. Stengart’s attorney-client privilege in the e-mails with her lawyer.

The Court neatly summed up its views on Internet use policies at the end of the opinion:

“Our conclusion that Stengart had an expectation of privacy in e-mails with her lawyer does not mean that employers cannot monitor or regulate the use of workplace computers. Companies can adopt lawful policies relating to computer use to protect the assets, reputation, and productivity of a business and to ensure compliance with legitimate corporate policies. And employers can enforce such policies. They may discipline employees and, when appropriate, terminate them, for violating proper workplace rules that are not inconsistent with a clear mandate of public policy…. For example, an employee who spends long stretches of the workday getting personal, confidential legal advice from a private lawyer may be disciplined for violating a policy permitting only occasional personal use of the Internet. But employers have no need or basis to read the specific contents of personal, privileged, attorney-client communications in order to enforce corporate policy. Because of the important public policy concerns underlying the attorney-client privilege, even a more clearly written company manual — that is, a policy that banned all personal computer use and provided unambiguous notice that an employer could retrieve and read an employee’s attorney-client communications, if accessed on a personal, password-protected e-mail account using the company’s computer system — would not be enforceable.”

Until now, courts examining the issue of whether employees have privacy rights in personal online communications sent from work computers have largely deferred to employer Internet use policies that reserved broad monitoring rights. It is not particularly surprising that the New Jersey judiciary, with its more liberal policy preferences and insistence on the sanctity of the attorney-client privilege, has diverged from more employer-friendly, freedom-of-contract regimes like Pennsylvania in establishing limits on what employers can peek at with Internet use policies. Still, the Stengart case does provide some useful guidelines for how employers (in New Jersey and elsewhere) can structure their Internet use policies to avoid the loss of productivity and liability risks associated with uncontrolled employee web surfing, Facebook usage, etc., while at the same time avoiding a tort claim for invasion of privacy.

1. Specifically discuss whether and how employee access of password-protected, web-based e-mail accounts may be monitored. In other words, don’t make the mistake of the employer in Stengart and assume that references to “e-mail” usage will be interpreted to cover personal Yahoo and gmail accounts as well as messages sent via the company’s official e-mail system. So, for example, you should mention that e-mails from personal web accounts might be stored on the hard drive of the employer’s computer. Also consider giving similar examples with respect to personal activity on restricted areas of social media sites when accessed from work. Greater clarity and specificity about monitoring of password-protected account usage could also help prevent a Stored Communications Act violation as well as liability for invasion of privacy.

2. Don’t send mixed messages concerning personal Internet usage at work. The New Jersey Supreme Court indicated that an employer has the right to prohibit the use of work computers and Internet access for personal reasons and to discipline or terminate employees who violate this policy. For cultural reasons many employers have resisted taking such a draconian line up to now, but it may be time to consider drawing a line in the sand if productivity loss is a major concern. If an employer is willing to tolerate limited personal usage of company IT resources (subject to the restrictions in the policy and any blocking of particular sites that the employer considers a distraction), the policy needs to be absolutely clear that even allowed personal communications may still be monitored and stored. Bottom line for employers: tell your employees that if they consider something really private or sensitive, they should do it at home using their own computer.

3. Be consistent in applying the policy. This is a logical corollary of #2, i.e., don’t send mixed messages. Inconsistent application of an IT use policy landed the city of Ontario, California before the U.S. Supreme Court on April 19. In City of Ontario v. Quon, a SWAT team member was issued a department pager under a use policy that clearly indicated everything could be monitored. However, a supervisor allegedly assured Quon that personal text messages would not be reviewed as long as the employee paid for any overages. Needless to say, they were. The question before the Court is whether the supervisor’s statements, which deviated from the IT use policy, were enough to give Quon a reasonable expectation of privacy in the personal texts. Based on the transcript of the oral arguments, the justices seem skeptical (more so, perhaps, than the New Jersey Supreme Court might be). Their decision will be forthcoming in the next few weeks. However, the real take-away here is the case should never have happened. Make sure that all employees, including (and especially) managers confirm receipt of, and are knowledgeable about, your company’s Internet use policy (for example, it can be discussed in employee information security training). A well-drafted policy should describe the business interests underlying it and the company’s seriousness in promoting those interests, and should identify a contact person who can address any questions or issues concerning the policy. The company should also cultivate a culture of compliance (if you’ll forgive the alliteration) so that no one is perceived as exempt; selective application and enforcement can lead not only to privacy-related liability but discrimination claims too.

Now that employee privacy is more than just a rallying cry for plaintiffs’ lawyers, consider whether your Internet use policy could use a little loving care.

A sad day for Philadelphia, to be sure, but what makes it noteworthy for purposes of this blog is that the city is threatening to sue Facebook, MySpace and Twitter for failing to monitor the postings that, according to police, arranged for the mob to convene in the Gallery (the indoor shopping mall at 11th and Market Streets) for a fight. This raises the same website immunity issue under 47 U.S.C. § 230 in the Communications Decency Act (CDA) that I blogged about in connection with last summer’s lawsuit against Domelights.com.

The CDA immunizes a provider of an “interactive computer service” from liability for most state and federal claims arising from objectionable content posted by third parties: “No provider … of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” See 47 U.S.C. § 230(c)(1)). Websites fall within the statutory definition of an “interactive computer service.”

The CDA immunity was enacted to promote robust and unfettered free speech on the Internet by insulating website operators and ISPs from defamation claims and other actions which are triggered by objectionable content originating with third parties and for which the site operator or ISP merely provides a forum or conduit. It would be difficult or impossible for the operator of a website with thousands of users to pre-screen all posts for tortious or other unlawful content, and the law does not require this. Courts have held the CDA immunity to preclude a wide variety of claims against websites relating to offensive, tortious and even dangerous activities of their users, including, in a recent decision involving MySpace, an alleged failure to implement security measures to prevent sexually predatory behavior by users against other users. However, a website runs the risk of being deemed an “information content provider” (and falling outside the scope of CDA website operator immunity) if it has a role in creating or soliciting the objectionable content.

Therefore, unless Facebook, MySpace or Twitter somehow had a hand in creating or soliciting any posts that incited the mayhem, it is difficult to see how the city could prevail in a claim for damages against them. This is how it should be. Social media provides networking tools and services to expand group communications, but like broadband and cell phone service, social media is morally neutral — it can be used for good (e.g., the Twitter Revolution in Iran) or ill (a mob of teenage thugs gathering at the Gallery for a fight).

If the operators of social media started losing expensive lawsuits because of their failure to monitor posts for hints of flash mob activity, they would have to charge for their services or go out of business. Internet privacy would probably also take a big hit as Facebook, MySpace and Twitter stepped up their monitoring and sharing of posts with law enforcement authorities. CDA website operator immunity was specifically intended to avoid such chilling effects on free speech.

More generally, the city of Philadelphia’s threats against social media betray the unfortunate mindset of big government nowadays that antisocial and self-destructive behavior must always be the fault, in whole or in part, of some business or society, not (or not simply) that of the persons engaging in the antisocial or self-destructive behavior. For example, childhood obesity is the fault of McDonald’s and other disseminators of “exploitive advertising,” not the fault of kids who eat Big Macs every day or their parents who let them. Plaintiffs’ lawyers aid and abet this erosion of personal responsibility and accountability by filing suits against businesses for failing to fulfill some fictitious duty to prevent every conceivable social harm.

At the risk of inciting political controversy, I respectfully disagree. The way to handle incidents like last week’s mayhem is not to sue technology companies on the West Coast, but to police known flashpoints such as the Gallery more aggressively and to mete out severe punishment for uncivilized behavior, which means jail time, not probation or community service. (In Philadelphia, the penalty for violating probation is often more probation, but that’s a separate issue.)

As a Center City resident who lives several blocks from the Gallery, I certainly share the city’s outrage over this latest flash mob incident. That is why I support the Philadelphia Police Department, the SEPTA transit police, and the Office of the District Attorney. But we’ve got to solve our own problems in Philadelphia, so let’s not pick on social media.

Personally, I enjoy Twitter (can’t deny it, since you’ll see my tweets all over www.baerbizlaw.com!). I understand its value as a promotional tool for entrepreneurs, and, as a technology and social media lawyer, I relish the legal mind-benders it raises. Still, I can’t say that millions of tweets like “Lying on the couch!” or “I’m sipping a capuccino!” make me shiver with voyeuristic delight or enrich the world.

Speaking of legal mind-benders, consider Horizon Group Management v. Bonnen, a Cook County, Illinois circuit court case in which a property management company brought a defamation suit against a former tenant who tweeted, “Who said sleeping in a moldy apartment was bad for you? Horizon realty thinks it’s okay.” The case is interesting because it involves not only the content of Ms. Bonnen’s tweet (defamation and libel require factual content, specifically the publication of a false statement of fact; pure opinions are not defamatory), but also how it should be interpreted in the Twitter context.

Ms. Bonnen was represented by attorneys at The John Marshall Law School Center for Information Technology and Privacy Law. In their motion to dismiss, counsel for the defense cited a 2009 study in which more than 40 percent of tweets were deemed “pointless babble.” (ONLY 40 percent?) “When one considers Ms. Bonnen’s allegedly defamatory tweet in the social context and setting in which the statement was published,” they argued, “its nature as rhetorical hyperbole is readily apparent.” Or, to put the argument more bluntly, given the widely acknowledged stupidity of Twitter and the verbal diarrhea of many of its adherents, no one should reasonably have read a factual dimension into Ms. Bonnen’s moldy tweet.

Circuit Judge Diane Larsen granted Ms. Bonnen’s motion to dismiss without issuing a written opinion, although she did note in court that the complaint was too vague. The result, therefore, turned on the judge’s view that the complaint was not well constructed enough to satisfy the Illinois defamation standard.

Although I admit I was not in the courtroom, I find the outcome a bit surprising because the tweet does seem to state, or at least clearly imply, that Ms. Bonnen was or is a tenant in an apartment managed by Horizon and that she experienced mold in that apartment. The “social context” of the tweet may be a legitimate focus of inquiry at trial, but essentially holding tweets to be opinion, i.e., not “serious”, at the motion to dismiss stage is a bit hasty.

More broadly, I disagree with the notion that tweets are qualitatively different from other communications from a legal standpoint. You can communicate facts and harm reputations in a 140-character microblog post, just as you can through more traditional media. The medium shouldn’t matter. In its response to the motion to dismiss, the property management company pointed out that, indeed, many tweets are serious — for example, the U.S. Centers for Disease Control and Prevention use Twitter to publish information.

At a national intellectual property law seminar I attended last year, a roomful of IP lawyers representing big law firms, media companies and, of course, Baer Business Law largely agreed that tweets could even be copyrightable, if they contain a “modicum of creativity,” the copyright protection standard stated by the Supreme Court in the Feist case (which held that alphabetical telephone listings are not copyrightable). Twitter may very well be novel, if not epochal, as a unifier of the human family. Having said that, treat with extreme skepticism any claim that tweets are legally different from anything else you write.

Title II of GINA prohibits both the use of individual genetic information in making employment decisions and any action by an employer to “request, require or purchase” genetic information, subject to certain limited exceptions. It also imposes strict confidentiality requirements when an employer or other covered entity comes into possession of genetic information. Title II applies to private and governmental employers with 15 or more employees. “Genetic information” is defined in the statute to include not only information about an individual’s genetic tests, but also genetic tests of family members and family medical history, including the manifestation of a disease or disorder in a family member. “Family members” include dependents as well as relatives of an individual or dependent from the first to the fourth degree. So, to take a completely hypothetical example, the fact that a maternal grandmother died of lymphatic cancer would be protected genetic information. This casts a very wide net indeed.

Employers Are Looking at You Online

The policies behind Title II of GINA are laudable: maintaining privacy and protecting individuals from job-related discrimination due to factors that are totally outside their control and not meaningfully related to their job qualifications or performance (but that may give rise to certain assumptions about insurance costs, work attendance, etc.). However, It’s not difficult to see how such an expansive definition of genetic information can create a legal minefield when blogs and social media are worked into the equation.

Blogs and social media provide the tools for us to share and publicize details about our personal lives, about where we are in this world and what we’re going through right now, as well as to foster an ever-greater interconnectedness that provides a substrate of meaning at the same time as it boosts our audience size. For these reasons, many employers, particularly those hiring for positions involving significant professional responsibility, customer or public exposure, or access to confidential information, Google job applicants and examine personal blogs and social media profiles as part of their due diligence process.

Generally speaking, employers are not legally prohibited from doing this and taking the findings into account when they make decisions about you (as long as the decisions aren’t based on certain impermissible factors defined by the law, such as race, gender, age, disability and now genetic background).

Therefore, if you plan to apply in the future for a financial services position managing the portfolios of wealthy clients, I would strongly advise you not to post a college photo of yourself drowning your svelte naked body in Yuengling. However humorous and compelling such a photo may be — and I really do like Yuengling! — it can easily be pulled up on the Internet years after it is posted, i.e., when you’re older, more professionally oriented and sober.

Finding Family Medical Information Online

All kidding aside, what if someone’s family member is ill and, out of an understandable desire to unburden herself and seek support from her user community, she shares information about the illness and the distress she is experiencing? If an employer then reads the page, does this constitute an illegal acquisition of genetic information?

GINA’s prohibition on requesting, requiring or purchasing genetic information excludes situations “where an employer purchases documents that are commercially and publicly available (including newspapers, magazines, periodicals, and books, but not including medical databases or court records) that include family medical history.” In its proposed regulations issued in March 2009, the EEOC expanded the commercially and publicly available document exception to also cover genetic information from documents that are available “through electronic media, such as information communicated through television, movies, or the Internet, except that a covered entity may not research medical databases or court records, even where such databases may be publicly and commercially available, for the purpose of obtaining genetic information about an individual.” (Such information also would not be covered by GINA’s confidentiality requirements, although it still could not be used to discriminate.)

The EEOC is seeking further comment on how genetic information acquired from personal websites such as blogs and social networking sites should be treated.

Some commenters have recommended a total exclusion for information on publicly available web pages, on the theory that employers should not be penalized for stumbling across information that an individual deliberately posts for the entire world to see (obviously, making an employment decision based on this information would still be forbidden).

Other commenters have urged the EEOC to take into account the site’s user restrictions and privacy settings: if an employer pries its way into a restricted user group (like in the Pietrylo case) whose members can view an individual’s family medical history, that looks more like an illicit attempt to acquire private or protected information than reading a publicly available website.

Still other commenters have suggested a regulatory standard that delves into the employer’s motives: is the employer searching sites for the specific purpose of obtaining genetic information? From the viewpoint of an attorney counseling businesses, I hope the EEOC avoids such a subjective test, since anyone could raise this accusation in a legal or administrative complaint with the flimsiest of evidence (or no evidence whatsoever). Due to the messy factual issue of intent it would be difficult for the employer to get the case dismissed before trial, meaning that costly litigation would be an ever-constant threat. However, the EEOC may already be thinking along these lines, since its proposed rules prohibit an employer from researching publicly available medical databases and court records for the purpose of obtaining genetic information.

Employers: Be Careful Where You Look

Even before the EEOC speaks on these issues, employers should take special note of GINA where online research plays a role in employment-related decisions. My advice to employers is to focus on the presence or absence of naked beer-waterfall photos and other content that is clearly relevant to a candidate’s judgment or his or her qualifications to hold a position; don’t go searching for (or dwell on or document) confessional posts about a sick aunt, however poignant and compelling they may be. If you do, you may risk a claim for either illegal acquisition of genetic information or (if the candidate is turned down or suffers some other adverse employment action) genetic discrimination.

Technology marches on, and, as always, the law struggles to keep up and adapt.

Most website comments annotated with Sidewiki that I saw in a quick, wildly unrepresentative and unscientific survey I conducted are precisely that — commentary, either praising or respectfully responding to the content on the site. However, it is easy to imagine Sidewiki being used for competitive, abusive or deceptive purposes. For example, a competitor could trash a site’s products and services or post links to its own site in an effort to divert traffic. Or (as happened recently with Apple and other high-profile sites), a nattering nabob of negativism could simply post pejorative comments without any type of economic agenda whatsoever. All of this raises a host of intellectual property and brand abuse issues for site owners.

Google posts an inconspicuous content policy which prohibits “unlawful” activities using Sidewiki as well as copyright infringement and “unwanted promotional or commercial content” (whatever that means). The Google Webmaster also allows a site owner to claim the topmost spot in the Sidewiki annotations, and Google provides a generic form for parties to complain about objectionable use of its products and services. Still, there is no clear way for a site owner to compel Google to cede back control of its real estate (if indeed the site as displayed through a browser enabled with the Google toolbar can even be likened to real estate).

Sidewiki is obviously too new a service for there to be any law on its use and abuse. Once again, a leap in new media technology has outpaced judges and legislators. Still, since I can’t resist plunging into uncharted waters, I offer a few preliminary thoughts below on intellectual property (IP) and other legal issues that both site owners and Sidewiki commenters should consider.

1. Copyright Infringement. It’s possible that some level of annotation, if substantial and creative enough, could result in the creation of an unauthorized derivative work (modification) of the website or specific website pages. (Web copy is protectable by copyright.) If so, this would be copyright infringement, since the ability to create derivative works is one of the exclusive rights of a copyright holder. A similar argument has been used, with occasional success, against some types of website framing.

Of course, commentary, particularly for non-commercial purposes, is one of the touchstones of fair use, so an infringement case would probably not succeed (either because of the lack of genuine modification or a fair use defense) against most run-of-the-mill commenters. Still, site owners concerned about voluminous Sidewiki comments may want to consider registering their copyrights in their site content, if they have not already done so, since registration is necessary to file suit under the U.S. Copyright Act and to avail oneself of the full panoply of legal remedies (including statutory damages) provided in the Act.

Another copyright issue that site owners should be aware of is the possibility that content posted via Sidewiki may itself infringe a third party’s copyright, in which case the site owner may find itself receiving Digital Millennium Copyright Act take-down notices. However, as mentioned above, the site owner has no real ability to take down objectionable Sidewiki annotations and can only contact Google. In this situation, all the site owner can do is file a complaint with Google and advise the copyright owner to do the same.

2. Trademark Infringement/Dilution and Unfair Competition. It’s possible to construct a creative argument that annotating a site with Sidewiki involves using the site owner’s trademarks (certainly its URL and arguably also other trademarks appearing on the annotated pages, as well as any trademarks used in the comments themselves). If this use is in commerce, i.e., in connection with an offering of goods or services for sale, and is likely to confuse or deceive consumers as to who is providing what goods or services, or suggests some level of sponsorship, affiliation, endorsement, etc., there may be trademark infringement and unfair competition under the federal Lanham Act as well as under applicable state laws.

Showing a likelihood of confusion (the touchstone of a Lanham Act infringement and unfair competition case) will likely to be difficult with Sidewiki. The site owner would have the strongest case where the Sidewiki commenter is a competitor, does not make its separate identity clear, and tries to capitalize somehow on the site owner’s brand in order to divert traffic to its own site. However, where the content or context of the comment make it clear that the commenter is unassociated with the site owner and the commenter does not use the site owner’s trademarks in its annotations or otherwise try to pass itself off as the site owner, making the case will be next to impossible.

Even in the “strongest case” scenario, the site owner will have to tackle the issues of whether the commenter has made commercial use of its marks (this point will be easier to argue if the marks actually appear in the comments themselves) and whether “initial interest confusion” is sufficient confusion for Lanham Act purposes. To explain the latter issue, once an Internet user goes to a competitor’s site via a link provided by the competitor in its comment, they will know, before making any purchase, that they are not dealing with the trademark owner. Having said that, some persons “initially confused” and diverted in this manner may not return to the original site. The legal question is whether this type of confusion is enough to support an infringement or unfair competition claim.

The “initial interest confusion” issue, as well as what constitutes use of a mark in commerce, were both litigated over the past decade in cases examining the use of trademarks as Google search terms and the embedding of trademarks as metatags. Unfortunately, there are no settled answers, although courts in the federal Ninth Circuit (the West Coast states, plus Alaska and Hawaii) are more sympathetic to arguments based on initial interest confusion. Whether you are a site owner or a commenter, therefore, knowing the law in your federal circuit is important.

Finally, where abusive, competitive or otherwise objectionable Sidewiki comments are posted on a site for an extremely well-known brand (such as Apple, Pepsi or Cadillac), the site ower may be able to claim trademark dilution in violation of the Trademark Act. Trademark dilution requires the use in commerce of a famous trademark or a near-identical mark in a manner that is likely to blur or tarnish the mark, whether or not there is any similarity between the goods or services or any likelihood of confusion. It therefore sidesteps the whole confusion issue discussed in the infringement and unfair competition scenario.

However, dilution does require use of the famous mark together with an offering of goods or services, so although a Sidewiki commenter’s choice of where to place their annotations (on the trademark owner’s site) may count against them somewhat, a dilution claim is an unlikely remedy against authentic commentary, critical or otherwise, that is not connected with the promotion of another product, service or website.

3. FTC Endorsement Guidelines. On October 5, the Federal Trade Commission (FTC) issued its final revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, the first rewrite of the Guides since 1980. Under the revised rules, which went into effect on December 1, 2009, companies that make payments or give free products to bloggers and other online commenters in order to generate positive buzz or favorable reviews for their products will now have to monitor closely the statements and claims made about the products and ensure that these relationships, if material, are clearly and conspicuously disclosed. Otherwise, they will face liability for unfair or deceptive advertising practices under Section 5 of the FTC Act, even if they do not control what the bloggers say (or, indeed, whether they say anything).

The bloggers themselves will face similar liability for false or misleading statements and non-disclosure of material connections. Furthermore, according the Guides, a company employee who posts messages on an online message board promoting the company’s product (a common practice) must clearly and conspicuously disclose his or her relationship to the company. Violations are punishable by civil penalties of up to $11,000 per violation. For a more detailed discussion of the FTC Endorsement Guidelines, please see my prior blog post.

What this means is that whether you are (1) a Sidewiki commenter being incentivized to post favorably on a website or trash a competitor’s site, or (2) a site owner or an employee or agent of a site owner posting favorable comments in response to negative Sidewiki remarks posted by someone else, you MUST disclose these connections. Knowing when to disclose is critical because, in the absence of any clear ability to force Google to remove objectionable comments, claiming the top spot on Sidewiki and posting responses to negative comments are indispensable elements of a Sidewiki brand management strategy. (New York’s attorney-general has also brought administrative proceedings against companies which tried to drum up favorable buzz by having their employees make anonymous posts in Internet chatrooms and public forums.)

If you have reason to believe that objectionable comments posted on your site via Sidewiki are being sponsored somehow by an undisclosed competitor or other third party, you should consider playing the UDAP (unfair or deceptive advertising practices) card by threatening to report the matter to the FTC and/or your state AG.

4. Terms of Use. Another option for site owners is to prohibit Sidewiki annotations, or perhaps certain categories of Sidewiki annotations (such as abusive or disparaging comments or comments that use your trademarks), in your website terms of use. Insofar as the terms of use create a binding, enforceable contract between the site owner and its users (which will generally be the case as long as they’re easily noticeable when accessing the site and don’t hold consumers to any unconscionable obligations), then making Sidewiki posts in violation of the terms of use will give the site owner a claim for breach of contract. You might also have a claim for trespass to computer chattels, since your site has been accessed for the purpose of etching on it in violation of your terms of use, although many courts will reject this claim in the absence of some excessive load on the site’s technical infrastructure that has the potential to exclude or disrupt other users.

There are two drawbacks to the terms of use approach. First, opposing this new social media technology may make you seem intolerant of free discourse and criticism (of course, the logical response here is “Do it on your own site!”). Secondly, for the reasons already mentioned, your ability to enforce the contract (other than through legal action) is limited, and appearing to tolerate numerous violations of your terms of use may hurt you in the cases you do want to prosecute. Since filing a complaint with Google for every single Sidewiki comment seems impractical and a waste of resources, it’s probably better to prohibit only those Sidewiki comments that are definably objectionable or use your intellectual property.

5. Other Legal Issues. A site owner might be able to proceed against particularly wrongful commenters (e.g., those who make false or deceptive claims or blatantly infringe the site owner’s intellectual property rights) for the state-law tort of tortious interference with prospective economic relations. Advertising-related causes of action under a state-law trade libel or unfair competition theory or the federal Lanham Act are also a possibility where the comments are false, deceptive or misleading (not to mention governmental action against UDAP, discussed in item #3 above). Site owners may be given some latitude by the courts in these cases due to the placement of the objectionable commentary; on a gut level, other things being equal, it would seem less wrongful on someone else’s website.

As the discussion above indicates, the legal landscape is hazy and will take time to resolve. Vigilance, therefore, is key. Website owners concerned about protecting their brands should claim the top spot for their sites on Sidewiki, monitor the other comments that are being posted, and make responses (with the disclosures required by the FTC) where appropriate. Site owners should also consider what type of approach to Sidewiki they wish to take in their terms of use. Finally, as with other forms of unwelcome commentary on the web, brand owners must weigh the benefits of cleansing their sites against the legal costs involved as well as the risk of enhancing the cachet of Sidewiki commenters they pursue.

Thank you, Google, for doing what you do so well — giving us intellectual property and new media lawyers tons to think and write about.

In my view, the disclosure requirements don’t apply to a typical sponsored ad run by an affiliate site because someone looking at the ad is likely to understand it as advertising for which the site is (presumably) being compensated. The disclosure requirements apply to an “endorsement,” which the new rules define as an advertising message that consumers will likely believe reflects the opinions, beliefs, findings or experience of a party OTHER THAN THE SPONSORING ADVERTISER, whether the endorser’s statements are the same as or different from the sponsoring advertiser’s. If a consumer perusing a site is likely to think it is the site owner or blogger speaking, not the seller of the product being written about, then there may be a disclosure obligation if the site owner or blogger is being comped or incentivized somehow for making the posts.

If disclosure is required, it must be “clear and conspicuous.” In FTC parlance, this requires, among other things, putting the disclosure somewhere near the post that constitutes the “endorsement” (i.e., the advertising). I would NOT bury it in the site T&C’s — the FTC has criticized this practice in other contexts (such as behavioral advertising) where it favors clear disclosures. So if there are multiple posts that constitute endorsements, you may need to include a short disclosure at the end of each post (unless you can associate a single disclosure with multiple posts in a way that makes it clear the disclosure relates to all of them).

Having said that, I also don’t think it is necessary to include a paragraph of legalese in each case. You might think about including a simple link entitled “Advertising Disclosure” after each post that causes a pop-up box to appear with a one-sentence disclosure (e.g., “The product reviewed here was provided by ____ free of charge.”). The bottom line is that I don’t believe the FTC is going to take a hard line on bloggers, particularly where there is some good-faith attempt to comply (as described above). The FTC itself has signaled that its primary target for enforcement will be advertisers, not bloggers. On the other hand, the product sellers may end up dictating what sort of disclosure they want, since they are also liable if bloggers don’t make the required disclosure.

Finally, with regard to affiliates who are also bloggers, a big question is what kind of incentive are they getting for writing favorable blog posts? Is it merely the affiliate advertising revenue (i.e., they want to say good things about the product they are running affiliate ads for) or are they getting something else too?

The latter case is easy — I would say include disclosure near the relevant blog posts, as discussed above. In the former case, one could make the argument that the presence of the ad means consumers are likely to suspect that the site owner has a compensated relationship with the product seller and therefore that the blog posts are sponsored advertising; ergo, no additional disclosure is needed. To be safe, I would probably still include some kind of short disclosure about the relationship, but the point is at least arguable. I think an ordinary blogger/affiliate running a site out of his house who isn’t realizing a significant amount of revenue and hasn’t previously been warned by the FTC is not facing a huge risk. (That said, if the FTC reads this blog or my article and comments on ReveNews, they may disagree with me!)

Now for my own disclosure: the foregoing is provided for informational purposes only and does not constitute legal advice on a specific matter. You should consult with an attorney (hopefully me!) before taking any definite action on this or any other legal matter.

On October 5, the FTC issued its final revised Guides Concerning the Use of Endorsements and Testimonials in Advertising (available for download here), the first rewrite of the Guides since 1980. While their title is not particularly noteworthy, these new rules broadly extend the concept of endorsements and testimonials to include as sponsored advertising all sorts of loose new media relationships that are increasingly used by marketers in place of traditional radio and television advertising and paid endorsements. (They also include changes in other areas, such as disclosures that must be made when advertising the results of using a product.) The Guides do not purport to be binding law, but are rather administrative interpretations of the law, issued to provide guidance on what the FTC considers to be deceptive behavior. However, violations are punishable by civil penalties of up to $11,000 per violation. The revised Guides will become effective on December 1, 2009.

For example, a marketer may provide unsolicited samples of its products to members of a blogger network who sign up for the network so that they can review the products on their sites. Or a marketer may supply a product, such as a video game, to one particularly well-read blogger known as an expert or authority in his area in the hope of gaining a positive review. Or the marketer may institute a word-of-mouth or viral marketing scheme where participants receive something of value (such as a payment or an entry in a sweepstakes) to e-mail their friends or send out tweets about the marketer’s product. All of these relationships may now be characterized by the FTC as endorser-advertiser relationships, wherein both the “endorser” (i.e., the person generating the content about the product) and the “advertiser” (the marketer) must ensure the absence of false or misleading statements and the “clear and conspicuous” disclosure of connections that are not reasonably expected by the target audience and are likely to influence purchasers’ assessment of the credibility of the statements.

When is a Favorable Post an “Endorsement”?

The threshold question is obviously what level of incentive turns blogger commentary about a marketer’s product into an “endorsement,” thereby rendering both the blogger and the marketer potentially liable for failure to disclose material connections and for deceptive statements. The FTC notes:

“[A] blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests. If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be “endorsements,” as are postings by participants in network marketing programs. Similarly, consumers who join word of mouth marketing programs that periodically provide them products to review publicly (as opposed to simply giving feedback to the advertiser) will also likely be viewed as giving sponsored messages.”

As an example, the Guides posit a consumer who purchases a new brand of dog food and reviews its favorably on her personal blog. If she purchases the dog food with her own money or gets it for free because the store routinely tracks her purchases and generates a coupon for a free trial bag of the new dog food, there is no endorsement. However, if the consumer gets the dog food as a result of joining a network marketing program under which she periodically receives various products about which she can write reviews if she wants to, her positive review will be considered an endorsement. As another example, a college student who has earned a reputation as a video game expert receives (as he has in the past) a copy of a newly released video gaming system along with a request from the manufacturer to write about it on his blog. He tests it out and gives it a favorable review. This is also an endorsement, and the FTC comments that because the review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, and given the value of the gaming system, the blogger should clearly and conspicuously disclose that he received it free of charge. Furthermore, “[t]he manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.” (Presumably, the Guides’ additional rules on the use of expert endorsements in advertising would also apply here.)

In yet another example given by the FTC, a skin care product manufacturer participates in a blog advertising service that matches up advertisers with reviewers. The marketer requests that the blogger try out its new body lotion and write a review. The blogger, totally on her own initiative and without any direction from the manufacturer, makes an unsubstantiated recommendation that the product cures eczema. Both the manufacturer and the blogger will be liable for the unsubstantiated claim and any failure to disclose that the blogger is being paid.

The FTC has explained that the purpose of the new rules is to treat new media in the same manner as traditional journalistic and advertising outlets. However, as a practical matter, many businesses treat these channels differently and will have to scramble to implement the necessary monitoring and enforcement mechanisms. For example, it is not uncommon for a business to buy a sponsorship from a non-profit organization where one of the benefits of the sponsorship is a favorable mention on the organization’s blog. In many cases, the sponsorship agreement is spotty and does not include detailed restrictions on what the organization can and cannot say about the sponsor’s products, and it is doubtful that anyone at the sponsor is giving the non-profit organization’s Web 2.0 chatter a compliance review. Indeed, the whole point of marketing to bloggers and through social media is to support a spontaneous and unforced style of commentary that has greater authenticity for cynical, tech-savvy consumers. Of course, in response to such comments the FTC has countered that its rules are designed precisely to protect consumers’ ability to rely on this quality of the blogosphere in making purchasing decisions. Liability depends, then, not on the existence of direct control over bloggers, but on whether “the advertiser initiated the process that led to [the] endorsements being made – e.g., by providing products to well-known bloggers or to endorsers enrolled in word of mouth marketing programs ….”

Design a Compliance Program

Unfortunately, corporate legal departments will now have to extend the long arm of compliance over a whole host of Web 2.0 marketing activities that until now may have been loosely policed, if at all. “In employing this means of marketing,” the FTC dryly observes, “the advertiser has assumed the risk that an endorser may fail to disclose a material connection or misrepresent a product, and the potential liability that accompanies that risk.” However, it also states that in the exercise of prosecutorial discretion it will consider “the advertiser’s efforts to advise these endorsers of their responsibilities and to monitor their online behavior ….”

The first step for companies, then, is to get a handle on what their marketing departments are doing to curry favor with bloggers and create buzz through viral online marketing. It is especially important to get a firm handle on the activities of advertising and PR agencies, since the FTC will hold companies responsible for the actions of these third-party agents. If compensation, free products or other valuable incentives (such as sponsorships) are being offered in the hope of stimulating positive reviews, then the company should institute and document a process of advising bloggers and other new media commenters about their duty to disclose material connections and the limits on the factual claims they can make about a products and its beneficial effects. There should also be periodic monitoring of the resulting posts, with documented follow-up action if necessary, to make sure they comply with the FTC’s endorsement guidelines.

If blogger relationships are managed through an advertising agency or other third party, the written contract with that third party should specifically address each party’s rights and obligations with respect to monitoring and compliance. At the very least, a company should reserve the right to audit and pre-approve an advertising agency’s solicitation of bloggers so that the company knows which bloggers the agency is dealing with and whether the relationships are of a type that could lead to advertiser-endorser liability and can monitor the bloggers’ posts about the company’s products.

If all this sounds like overkill (and no doubt it will meet with fierce resistance in some online marketing departments), it is critical to remember that incentivized blogger buzz is now treated the same as any paid endorsement: according to the FTC, both are advertising subject to disclosure requirements and prohibitions on misleading or unsubstantiated claims. The compliance burden may, in fact, prove too onerous for some companies. In this case, their best bet is to implement policies that prohibit the payment of compensation or giving away of valuable products in the hope of generating positive online buzz. Favorable reviews are not “endorsements” within the meaning of the Guides unless they have been incentivized in some way.

Implement a Social Media and Blogging Policy

Promoting compliance within organizations also it makes it essential, now more than ever, to have a social media and blogging policy that covers both references to the company and its products in employees’ personal posts as well as the use of social media and blogs for marketing and other business purposes. Not only is it a best practice to treat company-initiated social media and blog posts as official corporate communications that require consideration of regulatory, securities, litigation and reputational risk issues, and possibly prior legal or regulatory review; the possibility that third-party posts may now be deemed company-initiated endorsements makes it vital to bring all Web 2.0 activities under one comprehensive policy. Furthermore, according the Guides, a company employee who posts messages on an online message board promoting the company’s product (a common practice) must clearly and conspicuously disclose his or her relationship to the company. This requirement should be specifically spelled out in the company’s social media and blogging policy.

Tips for Bloggers

As for bloggers and other online commenters, they should be sure to disclose any compensation or benefits they receive to comment on products and, if they do have such a connection to a marketer, should be very careful to follow the guidelines furnished by the marketer (which the marketer is required to provide) and not make general or sweeping factual claims about the product or any claim that can’t be easily substantiated. If a blogger chafes at submitting to this degree of oversight and control, he always has the option of buying the product himself, for example, rather than receiving it as a freebie. The FTC has indicated that advertisers and not bloggers will be its main enforcement target. However, a blogger who runs a “substantial operation” that violates the rules and who receives a warning will still be at risk. Moreover, the FTC can adopt a more aggressive enforcement stance at any time.

The FTC’s rulemaking will heavily influence the way marketers generate buzz on the Internet and warrants close scrutiny of participation in blogger and viral incentive programs by all parties involved.