FTC Targets Viral Marketing With New Regulations

The Federal Trade Commission is currently revising the guidelines on endorsements and testimonials for the first time since 1980. While the current guidelines have clearly become dated, some of the newly proposed guidelines are causing concern for US advertisers.

The guidelines being reviewed by the FTC would change the rules to hold companies liable for untruthful statements made by bloggers and social networking users who have received samples of their products. Additionally, the proposed guidelines would hold bloggers liable for the statements they make about products.

If adopted, these new guidelines could cause a  major shift in the growth on viral and “word-of-mouth” marketing. The American Association of Advertising Agencies has argued that the new regulations are far too stringent and would damage innovation in the emerging field of social media. The effects could be very significant if bloggers and others that practice viral marketing become discouraged from publishing content for fear of being held liable for any potentially misleading claim.

It will likely be difficult for the FTC to determine which bloggers are acting as an agent of a company  and which are acting on their own. Still, the push for government regulation of blogs and social networking websites should be a major concern to all internet  marketers. The new regulations are still being reviewed and have not been adopted yet, but this will likely be a very hot issue for the marketing community in coming weeks.

Tagged as: bloggers, FTC, FTC Regulations, new FTC regulations, viral marketing, viral marketing regulations, word-of-mouth marketing