Will the FTC's Guidelines Blow Up Tech Publications?

Author: John Honovich, Published on Oct 04, 2009

The US FTC's new advertiser guidelines could radically change the nature of tech publications through a significant increase in regulation of published content.

Despite the media's emphasis of these guidelines on bloggers, their impact is clearly far broader - including researchers, analysts and industry experts. To explain this, we examine the final revisions to these guidelines in detail (read the FTC Guidelines for yourself, starting at page 55).

Tech Publications are Funded by Manufacturers Seeking Promotion

The reality is that most technology publications are funded by manufacturers who seek promotion of their products. If you have any doubt about this, simply review any of their media kits (see example 1, example 2 and example 3).

Beyond that, as we have seen with Frost & Sullivan awards and whitepapers, it is common for analysts/researchers to charge manufacturers undisclosed amounts for those items. Similarly, experts can have undisclosed lucrative consulting arrangements with manufacturers.

Examining Details of the FTC Guidelines

These guidelines are broad. The title says as much, "Guides Concerning the Use of Endorsements and Testimonials in Advertising."

Any publication that meets these guidelines would be required to make "clear and conspicuous disclosures" of their financial relationship. The guidelines, however are unclear about what that entails.

Endorsements Covers Almost Anything

The FTC has a very extensive definition of endorsements: "any advertising message ... [that] consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser." [from 255.0(b)] As such, even if someone simply cuts and pastes a manufacturer's press release, this would be considered an endorsement - far broader than just product reviews or tests.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Almost Anyone Who Knows Anything is an Expert

This guidelines affect anyone who is reasonably considered an expert, not just bloggers: The FTC defines an expert as "an individual, group, or institution possessing, as a result of experience, study, or training, knowledge of a particular subject, which knowledge is superior to what ordinary individuals generally acquire." [from 255.0(e)] Lots of tech people will fall under this definition including trade magazine editors.

Almost Any Financial Transaction is Covered

The FTC wants disclosure for almost any material connection between a manufacturer and a publisher. Specifically, "When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed." [from 255.2]

The Potential Impact

Based on the language in the guidelines, this has the potential to impact most of the things written in technology.

Certainly, things that are directly paid for, like Frost whitepapers and awards and Axis IP test will be included.

What will be interesting to see if advertising/sponsorships for a publisher's other services are included. For instance, SIW recently published a review of Cisco's strategy. This year, Cisco has sponsored 3 SIW webinars which list for $15,000 USD each. From my reading of the guidelines, it's not clear whether or not that must be disclosed.

If publications can accept sponsorships from manufacturers for other services and not have to disclose them, the regulations will be essentially worthless. Publishers will simply do the reviews for free and buy the products themselves while still profiting from manufacture sponsorship of newsletters, display ads, etc.

The Risks in Enforcing

The big challenge will be whether and how the FTC plans to enforce this. I do not know what resources the FTC has available to enforce this but there easily could be tens of thousands of cases immediately. Plus, it may require forensic accounting to truly ascertain the material connections between companies.

What remains to be seen is how broad and how forceful the FTC is willing and able to go. If they enforce it stringently, it could have a massive and valuable impact in pushing publishers to provide more honest and unbiased information.

Most Recent Industry Reports

The Xiongmai Botnet 'Recall' Will Not Work on Oct 25, 2016
The Xiongmai 'recall' has been the topic of global news, following the unprecedented bot net attacks that use their equipment, among...
Hikvision Partners With Intel Movidius For Artificial intelligence Cameras on Oct 25, 2016
The world's largest camera manufacturer is partnering with the worlds largest semiconductor company to create a series of intelligent...
Intel Movidius Targets Video Surveillance Market on Oct 25, 2016
The most commonly used chips in IP cameras come from Ambarella, Hisilicon or TI. Now, Movidius, who Intel announced acquiring in September, is...
Favorite Access Control 2016 on Oct 25, 2016
Integrators told us "What is your favorite access control management software/system? Why?", and the responses are interesting indeed. While no...
Video Surveillance Manufacturers Risk Lawsuits For Botnet Attacks on Oct 24, 2016
The unprecedented scale of internet outages on October 21st from botnet attacks risk triggering lawsuits against video surveillance manufacturers,...
Mobile VMS Top Integrator Problems on Oct 24, 2016
In an IPVM survey, integrators report 4 problems most consistently with using mobile VMS applications: Network setup / cybersecurity...
Chinese Company Xiongmai Threatens Legal Action Against Western Accusers on Oct 24, 2016
The Chinese video surveillance manufacturer, Xiongmai, whose equipment numerous sources blame for driving massive Internet attacks over the past...
"WTF?!?!? Who is Brian Karas?!?" Exclaims Knightscope on Oct 21, 2016
Knightscope co-founder Stacy Stephens emailed us: He may not have intended to send it to us and he probably can figure out who Brian Karas is,...
Security Consultants Speak Episode 1 - Protus3 on Oct 21, 2016
This is a first of a series of conversations with security consultants. If you are a security consultant that wants to talk and can share frank...
Sony and Samsung Breaking VBR on Oct 21, 2016
For years, users have known variable bitrate (VBR) as one thing only: bandwidth varies, compression stays the same. This is not an accident but an...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact