Good commentary on the Federal Trade Commission’s plans to regulate the social media for conflicts of interest, implicit conflicts of interest, shadows of penumbras of conflicts, and did the publisher send you that review copy for free?

At issue is the FTC’s recent and now revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Gordon Cravitz, Wall Street Journal, “Bloggers Mugged by Regulators“:

There should be more disclosure, but the Web is different from earlier media in ways that make government regulation less relevant and practical. The Web has its own self-regulatory mechanisms. Failing to disclose interests sullies one’s reputation online, and reputation harm travels faster and lasts longer than it did before the Web.

There’s also greater need for caveat emptor online, because there is no practical way that any government agency can monitor the world’s bloggers and posters. There will always be people who post comments about products and services that are self-serving in one way or another, at least by someone’s definition.

The Manhattan Institute’s Walter Olson comments at Overlawyered.com, with a good roundup of links, as well. From “Where did you get that keychain?”

Meanwhile, on Wednesday, the FTC held a conference call for reporters to dismiss concerns as unfounded. “They are not rules and regulations, and they don’t have the force of law,” said Mary Engle, associate director for advertising practices at the FTC’s Bureau of Consumer Protection — which may be narrowly true but is hollow reassurance at best, since the guidelines plainly are meant to signal where the commission intends to aim its future enforcement efforts, and since not all bloggers will be willing to defy the guidelines on the assumption that courts will refuse to go along with the FTC’s interpretations.

Regulators expand their regulatory reach and enforcement to address a perceived need — the need as perceived by the regulators (or the “consumer activists” or trial lawyers, who are often just regulators-in-waiting). Did any of the lawmakers who voted for the Consumer Product Safety Improvement Act think the Consumer Product Safety Commission would launch a “Resale Roundup” enforcement regime targeting yard sales? But that’s what happened.

At a time when unemployment is nearing 10 percent,  the question regulators should ask themselves is whether these FTC guidelines in any way encourage economic growth and job creation. Theoretically, yes, transparency helps provide more information to the marketplace, enabling consumers to make better choices. But in this case any transparency is offset by vague guidelines and reassurances that leave users of social media uncertain what standards they should follow to avoid the FTC’s targeting. In the meantime, time, effort and dollars that could be better spent in the private sector are being wasted by the government.

So, is there a pressing need for new guidelines? No. Do these new guidelines encourage economic growth? No. Well then…

Walter Olson at Overlawyered.com, who helped create the genre of legal blogging, has thoughts about the Federal Trade Commission’s proposal to regulate the social media to force disclosure of economic relationships. From “Required FTC blogger disclosure“:

Publishers sometimes send me books in hopes I’ll review or at least mention them. I occasionally attend free advance screenings of new movies (typically law-related documentaries) that filmmakers hope I’ll write about. This site has an Amazon affiliate store which has from time to time provided me with commissions after readers click links and proceed to purchase items, though it’s been almost entirely inactive for years. I get invited to attend the odd institutional banquet whose hosts sometimes give away a free book or paperweight along with the hotel meal. I’ve been sent “cause” T-shirts and law firm/support service provider promotional kits over the years, pretty much a waste of effort since I don’t much care for wearing such T-shirts and am not exactly famed for posts that sing the praises of law firms or their service providers.

Under new Federal Trade Commission guidelines in the works for some time, I could apparently get in trouble for not disclosing these and similarly exciting things. In addition, the commission’s scrutiny will extend to areas less relevant to this site, such as targeted Google advertising and results-not-typical testimonials.

With many more links to commentary on what appears to us an aggressive effort by a federal agency to regulate for the sake of regulating.  Our question: What is the terrible threat that warrants this government attack on free speech?

UPDATE (1:40 p.m. Friday): More from Walter, with reaction to this remarkable photo taken by the blogger WhiteCoat at the American College of Emergency Physicians. No, no reason for bloggers to fear overregulation by government.

From (our new favorite) the Consumer Advertising Law Blog, “FTC Prepares to Crackdown on Conflicts of Interest in the Blogosphere“:

Controversy is brewing over whether the FTC will exercise its enforcement discretion and go after bloggers for violations of the current testimonial guides or the revised testimonial guides once they are approved (likely later this summer). The issue is whether a blogger who is compensated by a manufacturer should disclose the connection when recommending the product. The compensation can be in the form of cash, advertising dollars or products, such as a free computer or a free vacation. Does compensation in any form affect the bias of the blogger such that a failure to disclose violates Section 5? Should the concern be limited to cases of cash payment but not free product? Does it depend on the total value of the compensation, whatever the form?

Conflict of interest for bloggers, eh? And if the FTC has the power to regulate that, well…

From Politico, “Washington Post sells access, $25,000+“:

For $25,000 to $250,000, The Washington Post is offering lobbyists and association executives off-the-record, nonconfrontational access to “those powerful few” — Obama administration officials, members of Congress, and the paper’s own reporters and editors.

The astonishing offer is detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he feels it’s a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff.”

The offer — which essentially turns a news organization into a facilitator for private lobbyist-official encounters — is a new sign of the lengths to which news organizations will go to find revenue at a time when most newspapers are struggling for survival.

Continuing on the topic of regulations, the left-leaning-leaning-leaning-oops-it’s-toppled-over magazine, The Nation, envisions a newly emboldened and empowered and progressive Federal Trade Commission now making common cause with the Justice Department against “corporate gigantism.” From “The Little Agency that Could“:

Congress needs to take action to unleash the FTC’s full potential. First, it remains a small agency with broad and complex responsibilities and cumbersome procedural burdens, especially in rule-making. Here, the FTC’s champions in Congress can make certain that Congress supplies more resources and streamlines the FTC’s authority. The agency also has a chronic problem of setting priorities: wherever it turns, there are corporate malefactors, large and small, deserving of prosecution. Last year then-chair Kovacic prepared a broad review of the FTC’s effectiveness on the occasion of its approaching 100th anniversary. In his report he called for a larger staff and mission for the FTC’s independent Policy Planning Office to set priorities for the agency–especially apt to its mission of helping to restore a healthy and competitive economy. But the effort needs more than planners; it needs many more prosecutorial troops on the ground.

The second problem facing the FTC is the hangover from eight years of reactionary Bush judicial appointments hostile to FTC cases. (These cases invoked innovative legal theories that aimed for such goals as denying mergers or breaking up huge conglomerates and cited not only traditional anticompetitive theories but broader theories of harm to the economy and the public welfare.) This impediment, too, could be significantly ameliorated by clear legislative authority.

Just what America needs to stay competitive and create jobs: More prosecutorial troops to pursue innovative legal theories.

We’ve been watching the hearing by the House Energy and Commerce Subcommittee on Health on H.R. 1346, the Medical Device Safety Act.

The first witness was David Vladeck, listed and introduced as J.D, Professor of Law, Georgetown University Law Center. He testified, vehemently, against federal preemption, criticizing the Supreme Court ruling in Riegel v. Medtronic.

Vladeck’s views don’t surprise us; he’s a hard-core advocate of expanded regulation, regards business as nemesis, and made a career out of suing people. Before coming to Georgetown, he was with Public Citizen Litigation Group for decades.

Thing is, Vladeck was announced on April 14 as the new director of the Bureau of Consumer Protection in the Federal Trade Commission. (FTC news release, Washington Post article.)

Even if he hasn’t started work at the FTC yet [see UPDATE below], do we really want our regulators — and the FTC is a regulatory agency — commenting on policy matters? You have a regulator declaring he holds little respect for the Supreme Court’s opinion on preemption and that members of Congress who believe in FDA preemption are wrong and ill-informed. That’s an improper role for a regulator.

In addition, the FTC has a large regulatory portfolio involving health care competition. While not the regulatory agency in charge of medical devices, the FTC has dealt with the industry. Won’t Vladeck’s appearance and testimony give people in the health care industry grounds to suspect they won’t get a fair shake?

All in all, a strange and imprudent appearance before the committee.

UPDATE: According to the Federal Leadership Directory (the Yellow Book):

The head of the Federal Trade Commission has announced new senior positions in the FTC, including a top post for a former top lawyer with the anti-business Naderite group, Public Citizen, who then migrated to the legal professoriat at Georgetown Law. No practical experience in business? Become a business regulator!

From the FTC, a news release, “FTC Chairman Jon Leibowitz Appoints Senior Staff“:

David C. Vladeck, who will serve as Director of the Bureau of Consumer Protection, has been a Professor of Law at Georgetown University Law Center, teaching federal courts, government processes, civil procedure, and First Amendment litigation. He co-directed the Center’s Institute for Public Representation, a clinical law program for civil rights, civil liberties, First Amendment, open government, and regulatory litigation. Vladeck previously spent almost 30 years with Public Citizen Litigation Group, including 10 years as Director. He has argued a number of First Amendment and civil rights cases before the U.S. Supreme Court, and more than 60 cases before the federal courts of appeal and state courts of last resort.

From the Public Citizen blog, Consumer Law and Public Policy:

Needless to say, we think this is really terrific news. David is a tenacious advocate for consumers and is taking up this important post at a time when strong leadership and enforcement on consumer protection issues is sorely needed. Congratulations to David!  The full announcement–listing the other five appointees, including the heads of the agency’s antitrust, economics, and policy planning divisions–is posted after the jump.

From the US PIRG Consumer Blog, “Vladeck to FTC, great choice.”

Great news. New FTC Chair Jon Leibowitz has selected constitutional scholar and consumer advocate David Vladeck to head the FTC Bureau of Consumer Protection. David’s been teaching at Georgetown Law for a while and before that was a longtime public interest attorney at Public Citizen. This is great news for consumers who want a fair marketplace and bad news for corporate criminals and those who support lax enforcement of the consumer laws. I will do a longer blog from a real computer. — From the Blackberry, in Baltimore.

From AdAge, “FTC Names Consumer Advocate to Lead Consumer Protection Bureau“:

“We expect Mr. Vladeck will vigorously pursue, with Chairman Leibowitz’s support, a serious consumer-protection agenda,” Jeff Chester, executive director of the advocacy group Center for Digital Democracy, said in an e-mail and blog post. He cited financial products, privacy, online advertising, and food marketing to children and adolescents as areas that “will now get the intellectual and strategic attention they deserve” at the FTC.

Unfortunately, the various “consumer groups” make no distinction between a “consumer protection” agenda and a “business is nefarious” and “let’s raise costs to the consumers” agenda.

The Center for Progressive Reform has the fullest biography we’ve seen of Professor Vladeck, “one the nation’s foremost public interest litigators.”

From AFP:

Oil price hits 15-month low under $68

4 hours ago

LONDON (AFP) — Oil prices slumped further on Thursday, with Brent crude briefly sliding close to 67 dollars a barrel and the lowest level for more than 15 months, as slowing energy demand took its toll, traders said.

Crude oil futures were down more than 50 percent from record highs of above 147 dollars reached in July, when prices had rocketed on fears of supply disruptions.

Dark malign forces are in league, hedge funds and oil companies, feeding panic and punishing the consumer. The time is now for Congressional hearings. Or maybe an FTC study on price gouging. Why hasn’t there ever been one?