The views expressed here are those of Charles Harwood and not necessarily the views of FTC Commissioners or other FTC staff members.
Current commentary and constitutionality:
Q. How does the FTC respond to some recent commentary that the Guides may present constitutional questions as it applies to “new media,” allegedly because on-line communicators are being treated differently from communications made through traditional media, or that on-line speech is being chilled or restricted?
A. The Guides do not raise significant constitutional issues. The Guides apply only to sponsored advertising messages, that is, commercial speech. Online commercial speech that is misleading is subject to the same restrictions as traditional advertising. Moreover, the Endorsement Guides apply across the board. The issue is – and always has been – does the audience understand the reviewer’s relationship to the company whose products are being reviewed? If yes, then a disclosure isn’t needed. If no, then a disclosure is needed. Here’s why that’s the case. For a review in a newspaper, on TV, or on a website with content similar to what you’d find in a publication or on TV, it’s usually clear to the audience that the reviewer didn’t pay for the product being reviewing. It’s their job to write reviews and no one expects that they paid for what they’re reviewing. But in other instances – for example, on a personal blog or social networking page – the reader wouldn’t expect the reviewer to have a relationship with the company whose products are mentioned or reviewed. Disclosure of that relationship helps the audience evaluate potential bias and avoid deception.
Implementation and effective date:
Q. The effective date of the Guides is December 1, 2009. Are current advertising campaigns using social marketing platforms that are scheduled to run past December 1 or are to be rolled out before December 1 subject to the new revisions or examples provided in the Guides?
A. We recognize that some current campaigns might run past December 1, and that others might be in final form already, even though they haven’t rolled out yet. We certainly encourage everyone to bring their campaigns into compliance with the Guides by December 1 if they can, but we realize that this might not be possible in every case. However, the longer a campaign is in effect after December 1, the more we would expect to see changes made to reflect the principles articulated in the Guides. The fact that a campaign was rolled out before December 1 will not protect an advertiser from scrutiny indefinitely.
Disclosure challenges:
Q. How do the requirements for “material disclosure” apply to social media platforms that have a limited number of characters, like Twitter, or to visual platforms that have a limited capability?
A. As noted above, the requirements apply across-the-board. Social media platforms should develop protocols that give consumers the information they need to evaluate sponsored statements. For example, hashtags such as “#paid” or “#ad” only use 5 and 3 characters, respectively. If a particular medium cannot accommodate the requisite disclosure, the staff believes that an advertiser should not use that medium for that particular advertising message.
“Clear and conspicuous” standard: Guidance and role of self-regulation:
Q. Will the FTC provide any business guidance on the application of the “clear and conspicuous” standard for on-line disclosures? What role can self-regulation play here? Will the FTC consider partnering with WOMMA to educate the industry?
A. Because of the almost infinite number of ads that are possible online, the Commission will – as it does in most other contexts – apply a performance standard with respect to these disclosures, rather than defining specific requirements for them. In a nutshell, the question is whether, in the context of the entire ad, consumers will likely see and understand the information that is being provided to them.
WOMMA members might want to consult the Commission’s “Dot Com Disclosures: Information about Online Advertising” for guidance, which is available at http://www.ftc.gov/bcp/edu/pubs/business/ecommerce/bus41.pdf. And we believe WOMMA and other industry self-regulatory groups can play an important role in educating advertisers and those who work with them about how the importance of making their disclosures clear, conspicuous, and meaningful to consumers.
Policies by Advertisers: Guidance and role of self-regulation:
Q. Will the FTC provide any business guidance on the content for the policies that are required for advertisers to educate, train, and monitor their social marketing agents? What role can self-regulation play here? Will the FTC consider partnering with WOMMA to educate the industry?
A. The staff is working to develop education materials that will be available on the FTC website, and also plans to participate in programs addressing these issues.
The Commission has long been a strong supporter of industry self-regulatory programs. In this specific context, industry groups such as WOMMA can play an important role by articulating and widely disseminating the standards that should guide the conduct of both marketers who use social media, and individuals who act on their behalf.
Enforcement of the Guides; role of self-regulation:
Q. How does the FTC intend to monitor compliance by both advertisers and bloggers (sponsored agents) with the Guides? What role will complaints by consumers, business competitors, and consumer groups play in initiating an investigation concerning compliance with the Guides? How can self-regulation play a part in policing the industry? What can WOMMA do to assist in preserving the integrity of the industry through its enforcement of its Code of Ethics and Standards of Conduct?
A. Our primary focus will be, as it always has been, on advertisers, not on consumer endorsers. Moreover, we will not be concentrating our resources specifically on advertising claims disseminated by social media. Rather, our goal will continue to be to protect consumers from misleading claims regardless of the medium by which they are disseminated.
We do not bring law enforcement actions based on, or to enforce, the Guides. The Guides are not binding law. They are intended to be educational – to inform advertisers and others how the Commission will view the use of endorsements as it enforces the prohibition in Section 5 of the Federal Trade Commission Act against deceptive and unfair practices.
We assume that the targets of our law enforcement actions will come to our attention by the same means as always, including the staff’s own viewing of ads and our monitoring of current events and advertising trends, consumer complaints, competitor complaints, and referrals from self-regulatory bodies.
Without knowing more about what WOMMA is doing to enforce its Code of Ethics, it is hard to say what else should be done, but this sounds like a good topic for future discussions. However, the staff believes that WOMMA’s longstanding support for transparency in the use of social media is fully consistent with the principles embodied in the revised Guides, and will help both preserve the integrity of the industry and protect consumers.
Celebrity:
Q. What is the definition of “celebrity” for purposes of the Guides?
A. Although the Commission has not formally defined that term, the basic question is whether the individual is known to a significant portion of the viewing public, so that consumers seeing that person endorse a particular product or service are likely to assume that he or she would not appear in an advertisement without being paid for his or her time. If consumers assume that the individual is being compensated, they are not misled if the advertisement fails to disclose that information.
Product placements:
Q. Do the disclosure requirements in the Guides apply to “product placement” or “branded entertainment” used by advertisers in contexts such as television shows, video games, or in movies?
A. That depends on whether claims are being made for the product. If so, then the rationale that lies behind the principle that material relationships between advertisers and endorsers should be disclosed applies. Indeed, the Commission can initiate a law enforcement action if false or misleading claims about the product are made through the product placement. However, if the product simply appears on onscreen without anything being said about it, claims being made about it, or even comment being made about it, then the rationale would not appear to be present.
I should also note that the Federal Communications Commission has regulations regarding disclosure of product placement and is currently considering the issues of sponsorship identification that arise from the use of so-called “embedded advertising” on broadcast television and radio and cable television, so that the FTC staff’s view is not the only one that advertisers should consider on this issue.
WOMMA is pleased to announce that it has formed a Legal Affairs Committee.
Peter Friedman 10:30 pm on February 9, 2010 Permalink
Our LiveWorld team (www.liveworld.com) has reviewed FDA discussion on social media in healthcare and put together the thoughts below. These ideas are based on our 26 years experience in creating and managing social network and online community services. Many of these services stretching back to the mid-80’s have had strong usage patterns around health care – be that patients, their friends and family or healthcare providers. In recent years we have been developing, managing and moderating social network venues for some of the top pharmaceutical companies. Our comments reflect this current experience as well
LiveWorld overall perspective on social networks, healthcare, pharma and the FDA discussion
In our 26 years of experience in social networking and online community we have always seen a very strong usage pattern around healthcare. From the early days of AOL to the present. The reason are simple: 1) Patients (and their friends and family) need emotional support regarding almost any illness from simple colds to terminal cancer and can best receive it from people like themselves with similar experiences; 2) The subject matter is deep and changing all the time, thus requiring constant education which helps both patients and healthcare providers. The best source again being other people with, near or treating the illness.
The benefits of online community interaction to the health and well being of our population far outweigh the risks. Generation C (for community-connected), those bone after 1978 that has grown up with these technologies driving a societal shift in behavior. Implications:
1) People will act on social networks anyway: Consumers and healthcare providers will seek emotional support and education via social networks, regardless of what the FDA or anyone else does or doesn’t do about it.
2) Support what people will do: Our population has developed skills to navigate, engage in, and filter information, opinion and relationships in social network environments. Studies have shown that people with health care concerns first go to the Internet to learn and frame their thinking. Then to doctors to focus their decisions and actions. they are best empowered to do more of this in more and better venues, rather than attempt to artificially protect people from themselves. Doing so will not reduce their activity, but merely limit the accuracy, value and benefit of it.
3) Pro-active pharma participation helps: Our society will benefit from enabling pharma companies to pro-actively participate, provide better information and create/support better social network venues.
4) Constructive guidelines rather than constraining regulations
* Pharma company participation should be encouraged and supported, not constrained by regulations that were developed in a different era and context.
* Liability regulation should be limited to the specific content provided by the pharma company
* Guidelines should be written that suggest proactive best practices for managing and participating in social networks.
LiveWorld perspective on questions WOMMA has raised relative to the FDA hearings:
1. What type of “code of ethics” or “code of conduct” for pharma advertising should WOMMA establish that may be useful as a template for the FDA?
LiveWorld Perspective. WOMMA should establish a pharma advertising code of conduct that with a social media policy including:
* Full brand responsibility for content the brand provides in its advertising, product-related content, including articles, blogs, and any comments its own official representatives make on its own or other sites.
* Full brand reporting of adverse events when all parameters for submission are present: (identifiable patient, identifiable reporter, specific product involved, and adverse event)
* Credentialed brand representatives, fully identified, who interact with and take oversight of conversations in any online social venue created by the brand.
* Full content moderation of any online social venue created by the brand, with moderators trained in recognition and escalation of adverse events and off-label use
* Credentialed brand representatives who may from time to time participate in online social venues not created by the brand.
Note we are recommending these for the code of conduct, not for legal liability in law or regulations
2. What specifically do you need from the FDA in terms of regulations? What type of standards should the agency enact?
* LiveWorld Perspective: The FDA should provide clarification that Pharma companies are not liable for user content that users post to their sites
- While this is overall the law already for most companies, the adverse events liability for pharma companies clouds the issue. Further, pharma companies need a clarification of this even apart from the adverse effects subject. We are not suggesting that pharma companies abdicate responsibility for managing their online communities and social network venues. On the contrary we think they should be proactive, moderate etc. Guidelines should recommend that pharma companies provide for community management and moderation. But they should not be subject to legal liability and financial penalty for user content on their sites, whatever it is – Just like other industries do not have such a liability.
3. What challenges are you facing with your pharma clients? What can the FDA do to assist you in promoting useful information to consumers in the form of marketing?
* LiveWorld Perspective: The FDA should provide clarification that pharma companies are not liable for user content that users post to their sites
- While this is overall the law already for most companies, the adverse events liability for pharma companies clouds the issue. Further, pharma companies need a clarification of this even apart from the adverse effects subject. We are not suggesting that pharma companies abdicate responsibility for managing their online communities and social network venues. On the contrary we think they should be proactive, moderate etc. Guidelines should recommend that pharma companies provide for community management and moderation. But they should not be subject to legal liability and financial penalty for user content on their sites, whatever it is – Just like other industries do not have such a liability.
4. What are the specific instances where pharma would accept responsibility by comments made about their products through 3rd party statements?
* LiveWorld Perspective: Pharma companies should be responsible for what they the pharma company places on the site from the company or from hired experts. However they should not be liable for content placed by users or 3rd parties acting on their own.
5. Do you believe that the FTC standards are useful for your pharma clients? Why?
* LiveWorld Perspective: Yes, but they should be separated into regulation (clarification of legal liability per above) and guidelines which are recommended best practices but do not subject the pharma companies to legal liability.