Talk show hosts can be held personally liable for false claims made in their endorsement spots under a new ruling by the Federal Trade Commission. The Commission’s revised interpretation of its long-standing rules on testimonial advertising might also chill some of the creative endorsements presentations that have appeared in recent years, including General Motor’s deal with several syndicated hosts, who frequently talked about GM and its products without clearly segueing into a commercial break.
According to the FTC press release announcing the revised policy: “While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.”
And note this: the new rules apply to any and all Internet bloggers. That’s a signal of potential future trouble for talk radio. This FTC — which thinks bloggers’ content needs to be regulated – is still dominated by Bush appointees. It seems likely that as President Obama’s commissioners move to the fore, the Commission will grow even more activist. A regulatory body that currently thinks it’s OK to rein-in the Internet will have no qualms about meddling the the content of federally regulated mass media.
The industry may get a taste of what’s to come in early December when the FTC holds a public “workshop” on “the future of the news media.” Want to feel your blood run cold? Here are three of the issues slated for discussion at the workshop, which is designed to help the Commission shape policy:
• Are new or changed government policies needed to support optimal amounts and types of journalism, including public affairs coverage?
• Should the tax code be modified to provide special status or tax breaks to all or certain types of news organizations?
• Should the federal government provide additional funding for news organizations?
So, what type of media do you think the FTC staff has in mind to support as it contemplates circumventing the news marketplace with such policies?