Hacker News Reader

Comment by jackfoxy | Hacker News Reader

It would be enlightening to trace the development from the 1st Amendment to the FTC having the power to implement regulations like this. Are these dangerous products? Do they fraudulently promise benefits? Are they targeting minors?

View on HN

There is no infringement of free speech going on. Celebrities are free to make endorsements, paid or otherwise. Companies are free to market their products in this fashion. The only requirement is that paid endorsements are labeled as such, which is not cumbersome or "chilling."

Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent).

Arguably, such labeling would also defeat the purpose or diminish the entirety of such advertisements, which infringes on the speech of the advertiser AND of the celebrity.

Devils advocate says that FDA mandates labels on food...which is also compelled speech that may be disadvantageous to producers. How is this different?

> Forced speech, such as labeling, is an infringement on free speech (ie. the right to be silent).

We already have plenty of restrictions on speech (the most well-known ones being slander and libel, but also plenty of regulations around speech that comes in the form of advertising specifically).

In this case, you still have two options:

a) make the post, but also reveal that it was paid for, or

b) don't make the post

It's not really forced speech when you still have two options, and one of them includes 'not saying anything'. It's also a pretty reasonable argument to make that making the paid post but not disclosing it is misleading, and there are already all sorts of laws restricting misleading speech in advertising.

Also, this only kicks in if the post is commercial - ie, if money changes hands. To give a "bright line" counterexample, it doesn't restrict celebrities from making posts about their favorite products if they have had no communication with the company at all.

You forget option c.

c) Don't get paid for the post and simply support the product because you believe in it.

The Government: you have two options, you can say "Hilary is great!" or you can say nothing. It's not compelled speech because you have two options.

Luckily, the courts do not construe the 1st amendment so narrowly.

Do you see any distinction between mandatory disclosure of compensation for endorsements, and mandatory disclosure of interest when recommending a stock?

Yes, because the latter has a direct nexus with a commercial transaction.

I was under the impression that, if paid for, political speech (which is the type of speech the First Amendment was intended to protect) already came with disclosure requirements that had been contested and ruled constitutional.

The appropriate analogy isn't a choice between being able to say "Hillary Is Great" or nothing at all, it's a choice between having to say "paid for by Super PAC for Issue" if accepting their cash to broadcast their view on Hillary, or not accepting the cash and saying whatever you like about Hillary.

The long and short of it is that there are different levels of scrutiny for different kinds of speech. First, "commercial speech" is narrowly defined. It is speech that does "nothing more than propose a commercial transaction." Second, even commercial speech receives First Amendment protection, just less protection. Instead of strict scrutiny, the Court applies an intermediate standard: the law must advance an important government interest by means that are substantially related to that interest.

As for the comparison with FDA labels--you can't look at just the fact that its "compelled speech" in the abstract. The back of a product box and a celebrity's instragram are very different venues in terms of expression.

Turn on many pop or hip-hop stations in the US in the morning and you'll hear the actual morning show host endorse all sorts of products that sound like a scam: discount cosmetic surgery, car rims for rent, accident attorneys and more.

In many cases I've heard them advocate as if they've used the product or service personally and got a good deal and there's never a "paid ad" or "promoted content" disclaimer (or maybe it runs at 3 AM?).

I think the murkiness of cases like this is that it's not clear that the speech is purely commercial. As someone mentioned elsewhere, it seems somewhat analogous to product placements in rap songs. There's clearly some commercial activity going on, but the root activity is also artistic—rappers would rap even if they didn't get paid for it, and celebrities would maintain social accounts even if they couldn't do product placements there.

FDA labeling is generally fine, but would we force an artist doing a large edible art installation to slap nutrition labels on it?

Personally, I don't really see what the big deal is. Consumers shouldn't be naive enough to buy something just because a celebrity likes it, but then again I've never understood the appeal of celebrities in the first place.

There is hubris in thinking you are immune to marketing, and if anything it makes you more vulnerable to it.

Celebrity isn't so easily defined. What if Bruce Schneier, who you could consider a "celebrity" of sorts in the security community, started (subtly) promoting Signal Messenger in his tweets and blog posts. Wouldn't you want to know if he was being paid to do that?

This is essentially what is happening when PewDiePie promoted a video game.

I do not support paying taxes for a government that serves corporate interests over my own. I do however support paying taxes for a government that attempts to prevent fraudulent people from manipulating me into buying a product I would not have purchased via an honest ad.

It's that simple. When our founding fathers established the 1st Amendment, they were not setting out to protect liars but those who speak the truth.

>When our founding fathers established the 1st Amendment, they were not setting out to protect liars but those who speak the truth.

The 1st Amendment was specifically designed to protect both truths and falsehoods so they could both enter the marketplace of ideas in order to allow the people to determine what is truth and the best ideas.

Moreover, the Founding Father's were keenly aware of people in power suppressing ideas commonly held to be false, but ultimately turned out to be true (i.e. the earth is not the center of the universe).

The time of Galileo and his troubles was further away from the time of the constitutional convention than the Civil War is from us.

i.e not e.g.

Galileo's troubles as you call them, was an example of false speech the new Government wanted to protect and be allowed to enter the marketplace of ideas. Moreover, I was not suggesting Galileo was the reason for the 1st Amendment.

Also, I am not exactly sure what the distance of the Civil War to today has to do with the distance of time from the drafting of the Constitution and Galileo. Seeing as the Founding Father's modeled the new Government off of the Roman Republic (509BC-27BC), they were more than capable of applying more modern history lessons taught by the Catholic Church and Royal Crown which they wished to avoid repeating.

The "marketplace of ideas" meme (along with many of what Americans consider to be First Amendment Free Speech protections) came into jurispridence in a 1919 dissent by Oliver Wendell Holmes in Abrams v. United States in which Holmes defended free speech rights based on the "marketplace of ideas" concept proposed by among others John Stuart Mill. Who was distinctly tardy to the Founding Fathers table.

There's a brief article on the particulars here:

http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=... (PDF)

There's a longer treatment in Thomas Healy's The Great Dissent.

http://www.worldcat.org/title/great-dissent-how-oliver-wende...

The concepts are curiously intermingled with much of the reformulation and representation of Adam Smith's ideas which took place over the 20th century, also generally misunderstood by the lay public thanks to an aggressive 60+ year marketing campaign by the Mont Pelerin Society and Atlas Network. But that's another rant.

Is misleading speech for commercial gain protected speech? If it is, then I can sell you a fake Rolex while stating that it is a real Rolex. Because my speech is protected, I can mislead and profit without consequences.

Forced labeling definitely raises free speech concerns: http://www.natlawreview.com/article/vermont-gmo-battle-conti....

>There is no infringement of free speech going on.

Sure there is. If they're taking money, they're not free to endorse without the requirement that they also disclose the payment.

That said, while we can certainly argue about what's reasonable at the margins, the government has a well-established (qualified) power to regulate commercial speech in particular--first amendment notwithstanding. You can't knowingly make false statements of fact in an ad.

There also already exist a variety of disclosure rules although these get into a much more gray area, especially given that you have everything from outright pay-for-play celebrity endorsement deals to giving bloggers free stuff to review. And, in general I agree that disclosure of things that could lead to conflicts of interest is very reasonable and not overly burdensome.

I don't see a significant conflict of interest. Nothing stops a celebrity or influencer from saying they love Foo Brand Widgets. The FTC is saying in the context of a business transaction which involves a company paying another individual to say that they love Foo Brand Widgets, there must be disclosure. I could see not disclosing as a form of fraud. I also don't see it as significantly different from labels the FDA requires on food packaging.

Is there any court precidence for cases of failure to disclose? Fraud is really a stretch...

Consider puffery: https://en.wikipedia.org/wiki/Puffery

If Company A Laptops secretly paid Mr Celebrity to say he only uses Company A laptops, and then I buy a Company A laptop because I want to use the same brand as Mr Celebrity, then I could argue that Company A have engaged in deceptive marketing. If they are up front about having paid Mr Celebrity, it seems to mitigate that a bit, because it's clearly a 'puff piece' (as your link says) instead of claiming to be true.

IANAL. Obviously. But that's my layman's take on it.

I would argue that it's your fault for trusting Mr Celebrity to give you good laptop recommendations. If Mr Celebrity's reputation isn't crippled by making a bad recommendation or two then you're picking the wrong people to advise you.

Are paid endorsements really puffery? Basketball players sponsored by Nike don't wear Nike shoes ironically.

(A comedy advert, like the Terry Tate: Office Linebacker campaign, seems closer to puffery)

Agreed. While the Supreme Court has sensibly concluded that there should be limits to free speech (see 'The Court held that government cannot punish inflammatory speech unless that speech is directed to inciting, and is likely to incite, imminent lawless action.'[1]), it would be interesting to understand how the legal argument that begins with the postulate:

  Congress shall make no law respecting an establishment of religion, or
  prohibiting the free exercise thereof; or abridging the freedom of speech,
  or of the press; or the right of the people peaceably to assemble, and to
  petition the government for a redress of grievances.

can yield, 'We believe consumers put stock in endorsements and we want to make sure they are not being deceived.'

[1] https://en.wikipedia.org/wiki/Brandenburg_v._Ohio

While I agree that the constitutional interpretation is flawed here. It seems we have thrown[0] it[1] out[2] the[3] window[4] for the most part.

[0]https://www.aclu.org/issues/criminal-law-reform/reforming-po...

[1]https://www.thefire.org/college-students-protest-against-so-...

[2]https://en.wikipedia.org/wiki/Federal_Assault_Weapons_Ban

[3]https://en.wikipedia.org/wiki/Internment_of_Japanese_America...

[4]https://en.wikipedia.org/wiki/PRISM_%28surveillance_program%...

That's because you forgot several other "postulates" that form part of that legal argument. Among them (this is not an exclusive list) are the Commerce Clause of the Constitution, and various canons of legal construction, including the one that holds that while a newer enactment generally has precedence over an older one, to the extent possible a newer enactment should also be read so as not to minimize conflict with an older one unless it explicitly seeks to reverse the effect of the older one.

Valentine v. Chrestensen: First Amendment does not protect “purely commercial advertising.”

What if they actually love the product, AND happens to be paid for it? ie: already drink a specific type of liquor, liquor company finds out and offers to sponsor them...

Which probably makes this difficult to enforce. Agent meets with advertiser. No promises are made. Celebrity posts about loving product. Then advertiser sponsors them. Defense: "I like the product and was doing this to help get the job."

That case was overturned by: https://en.wikipedia.org/wiki/Virginia_State_Pharmacy_Board_....

Thanks. Glad to have an actual lawyer appear at times like these :)

So is this legal?

Right now the boundary for restrictions on commercial speech seems to lie right around labeling for GMOs. Calorie labeling is okay because its purely informational, factually neutral, and has a direct link to a real concrete government interest. GMO labeling is on the border because there is a strong political element to it, and there is no proof GMOs (unlike too many calories) are actually bad and therefore it does not implicate a government interest.

I would think the FTC's action is substantially over that line.

Is FTC cracking down on celebrity posts in general, or are they cracking down on companies which celebrities are self-employed in, and that sell advertisement?

Companies are made of people, and people have human rights. However, in order to have any market regulations at all, we need to limit what companies can say and do. As such we normally separate what people do in the name of a company, and what people do as a private citizen. For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force.

> Companies are made of people, and people have human rights.

Companies are a fictitious, they are not natural, they don't exist without people or laws and they exist only to serve the betterment of society. Just because humans have right does not mean companies do.

> For example, we expect police to speak and act in a specific way when acting as policemen, but they are completely free to write and say anything under the 1st Amendment when not on duty and representing the police force.

Poor example. Police are public servants and don't work for companies, they work for society and all of society and how they behave off duty is an excellent reflection of how they would behave on duty. If a police officer posts racist Facebook posts, they can and should be fired.

Companies are groups of people acting in concert toward goals. There is very little that is more natural for social primates like humans to do. Your distinction and definitions are the real fiction.

I agree with this definition. Additionaly, these same groups of people should be held accountable in a court of law for crimes performed/delegated from behind the facade of a "corporate" entity.

Another thing is that there is no way to %100 enforce this, so this gives the FTC the ability to pick and choose who is targetted. Seems ripe for corruption to me. I think a better service would be to provide a credibility rating service, where people can vote on a celebrities endorsement history. Though there's no money from fines in that.

I think the authority is firmly routed in the commerce clause of the constitution, and that it is perfectly reasonable for it to be so. The difference is speaking your mind and being paid to.

The first amendment is not a license to do or say anything for any reason.

Do they have a history of settlements with various conditions that masquerade as case law? Yes.

Reply on news.ycombinator.com