The FCC is planning to start cracking down on bloggers who endorse a product without disclosing any interests they have in the product. The Citizen Media Law Project has a good analysis of the FCC's precise plans
I have some more basic questions about this terrible development. Let me describe the main three.
First, shouldn't a question like this be decided in Congress? We aren't talking about the fine details of what the FCC will go after, but a major new category of speech they are going to limit. I would think such an issue should be decided in Congress. Has that already happened and I simply missed it? Where was the debate? The public consideration?
Second, what is really so special about the Internet version of these activities? I asked the same question about the Communications Decency Act, and I never found a satisfactory answer. Yes, it's terrible to mistreat children, but why do we need new law just because you do it over the Internet? Likewise, we have a carefully developed system for dealing with false advertisement and libel. What precisely should be different about these acts when they involve the Internet?
That raises the third issue. Why do we want a third party, the FCC, to bring these cases? It's a wonderful check on legal abuse when part of the burden of a case is to prove that the accuser has been personally harmed by the accused. It eliminates many frivolous cases, and it allows for meaningful settlements to be worked out. To contrast, if the FCC is supposedly standing up for the public, it's hard for them to make a fair settlement, because they don't really know what the amorphous public would settle for if they were actually asked.
For cases of libel, it seems utterly obvious that the entity who should bring the case is the one who was wrongly discredited by the speech in question. For any other party to do so is pure nosiness. For cases where an advertiser didn't disclose their financial incentives, I grant it's hard to identify who precisely is harmed and should bring the case. For that very reason, however, I don't see the appeal of that sort of law. If no identifiable person is harmed, then let the speakers speak. People who are shills for some corporation will see their reputation discredited rapidly without needing the cops sicked on them.
Overall, it's a historical oddity that the FTC has been allowed to police the content of communication. That's normally not allowed in the U.S., due to the First Amendment, but the FCC argued that broadcast is different because it is pervasive. It was a weak argument to begin with, but it's simply absurd for the Internet and for cable television. Nonetheless, organizations strive to survive, so now we see the FTC trying to maintain this branch of their activity as new forms of communication come out.
We shouldn't allow it. The FTC is supposed to report to the people, via our Congress. I hope Congress decides to exercise their oversight. We shouldn't let our speech rights erode just because the FTC wants something to do with their resources.