Avoid Liability: Monitoring Bloggers for False Statements
True False Question
If you are at all active in social media, then you know that the Federal Trade Commission (FTC) has issued its guideline concerning the use of endorsements and tesimonials in advertising. Bloggers that do reviews have been a-twitter about the requirements for disclosure of endorsement relationships. And yes, the new guidelines require bloggers to disclose endorsements beginning on December 1, 2009.
Personally, I don’t think that the disclosure requirements are such a big deal. I’ve always been a proponent of ethical blogging and disclosing relationships. However, I do think that companies must realize that they have potentially significant exposure under the new guidelines. The new guidelines can result in the imposition of significant liability on companies seeking to use social media to promote their products, particularly in the green arena, if they don’t take steps to protect themselves. Why? Companies must realize that they can not only be held liable for failure to disclsoe a material relationship but also for misleading statements made by their endorsers. And it is this misleading statement category that seems particularly dangerous in the green arena.
Of course, a company can only be liable if an endorser-sponsor relationship exists. That is the critical threshold determination. But simply soliciting bloggers to review your product and sending them free product to review is enough to create that endorser-sponsor relationship. Specifically, an endorsement is defined to mean “any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) 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.” Several examples are given in the guide to demonstrate when an endorser-sponsor relationship is created. One of the most telling is a consumer that has joined a marketing program and receives products periodically for review. If she receives a free product and then writes a review, her review is an endorsement.
So, if you are company using social media – by sending free product to bloggers, by hiring a marketing company to target bloggers, by inviting bloggers to events and providing them with free product – you are creating potential endorser-sponsor relationships. Your company can now be potentially liable if the blogger doesn’t disclose the relationship and/or the blogger makes false statements in her review. The disclosure obligation you may understand, but also be aware that “advertisers are subject to liability for false or unsubstantiated statements made through endorsements . . . ” (Sect/ 255.1(d).)
That doesn’t seem like a big deal to most companies – why would a blogger make a false statement? But the example given in the guideline indicates how easily this could happen. The blogger reviews a skin care product and, although the company makes no claim about its ability to cure eczeman, the blogger states that it does. Now the company is potentially liable for that false statement.
Or, take a prominent purportedly green baby skincare line. The company advertises itself as “free of dioxanes from sulfates.” Okay, if you have any chemistry background, you know this is sort of a silly statement. But the presence of 1,4-dioxane in baby bath products is important to many, so the blogger reads the product literature and adds the statement the products are free of dioxane, without the careful qualification. Now the company is liable for the false statement.
Or, let’s consider SIGG. If the FTC regulations have been in effect the last couple of years, wouldn’t SIGG be arguably liable for all those countless blogs talking about how SIGG bottles are free of bisphenol A (BPA), assuming, of course, that the bloggers were endorsers. SIGG knew that the bottle liner was not free of BPA, it was just free of leaching above 2 ppm.
Okay, what can a company do? The guidelines indicate that a company can limit its potential liability by ensuring “that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated.” Also, and more critical, the advertiser “should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.”
So, any company that has endorser relationships in social media MUST have in place now (Dec. 1 is just a few short weeks away) a social media policy and monitoring program. The policy should require, at a minimum, bloggers provide certain guarantees about their FTC compliance statements. Training and guidance documents also are required. Further, it is critical that the program has a monitoring component to verify the disclosure. Even more critical is that the monitoring program includes follow up on reviews each and every time product is sent out for review. This is more than just a Google alert for a company or product name, but a true analysis of the review to verify that it does not contain any false statements. And if there are any false statements, the advertiser must act to prevent the continued publication of the false statements.
I personally don’t think that can be done simply by computer software, although such software can be of use. Instead, I think a company must do more. I believe that the monitoring component must include trainsed staff familiar with the product/company, especially in the non toxic/eco-living/green arena where labels, standards and definitions are not constrained by regulations.
(Shameless self promotion – 3 Green Angels provides monitoring, of course, and we would be happy to discuss with you. And as an attorney, I help companies develop social media policies and programs.)
The Twitter #hashtag Tango: Dance at Your Own Risk
Recently I attended an event hosted by a PR firm for its client Euro Pro. Euro Pro makes Shark cleaning products and have just launched a new product called the Ninja (a food processor/blender) with the Food Network’s Robin Miller’s backing. I accepted this trip for three reasons:
1. I wanted to see other bloggers and network – I love doing this.
2. I like Robin Miller and her healthy cooking strategies and I was interested in a product she is promoting, especially if it will cut down on my prep. time in the kitchen.
3. I wanted to learn more about how PR companies are interacting with bloggers and using social media for their clients.
The post discusses reason number 3 – PR companies, bloggers & social media. To read my review of steam cleaning chemical free cleaners and the Ninja, as well as the bloggers I met, subscribe to Green and Clean Mom for updates.
PR firms have been interacting with bloggers since my career began - some better than others. PR firms still pitch bloggers with “Dear Blogger” emails but many PR firms are attempting to learn more about how to interact with and market to bloggers and engage them. Most bloggers also use social media to interact with their audience. Many bloggers have a reach well beyond their blogs. Consequently, bloggers and their networks are even more appealing to companies. As a result, PR firms want to interact with bloggers who have large nets to cast as well as those perceived to have high integrity and disclosure. Events Like M2Moms and Blogger Business are two events that companies and firms are attending to learn more about ways to respect, treat and interact with the mom blogger and visa versa – we are all learning to navigate through these waters.
Is there a Risk?
The #Nestlefamily twitter/blogger firestorm amply illustrates that both the company as well as the blogger who decides to attend an event face risks. In the case of the Nestle incident, Nestle said it was just beginning to enter the social media scene and inviting bloggers to engage with it was the first step. I get that (I’m not commenting on any Nestle family history or the boycott) but a company taking a first step should not jump into the deep water not knowing how to swim. Obviously, such a compnay can quickly drown as Nestle did, and the poor bloggers felt like they needed to be life guards. While one blogger calls the hashtag created for the Nestle family event as hijacked others wonder why Nestle wasn’t more responsible. Given Nestle’s history, if bloggers tweet that Nestle is wonderful and doing great things on a public space then shouldn’t reactions be expected? It all gets very messy but there is lots that can be learned.
A very simple lesson: Companies just starting using a hashtag and announcing a big event with a blog post MUST have a social media plan in place and understand the goals of the event. Nestle did not seem to know what it wanted – it said it was just looking for input from a select group of bloggers. If that was the case, then do it privately without a big splash in public forums. It also said it was trying to create a buzz. That’s wonderful, but don’t try to create a buzz before you are ready to respond in the social media arena. Keep in mind that when a company or blogger says anything on Twitter it becomes public.
For bloggers this is becoming more common, these paid trips and hastag events for buzz. This means that perhaps it is catching on as a cheaper way for a company to create buzz, get feedback and catch the publicity wave. Like myself, bloggers need to have reasons for why they are going and defend those reasons. Bloggers also need to do some due diligence. In my opinion, a paid trip does not equal an agreement for loyalty and in my case I have never agreed, promised or signed anything to say I will do something for the company or firm, other than attend the event. Granted, I have disclosure obligations should I say anything, positive or negative.
The risk for the blogger is wasting time and being under fire for attending an event. The blogger is also at risk for how she defends herself and her decision as well as how she promotes the company and use the hashtag(s). Bloggers have to really think about how they act, promote themselves and engage with their own blog community and the companies and firms wanting their help.
What are your thoughts on this new social media tango that is happening between bloggers and companies??
