Free Speech? What’s Free Speech?
Internet site Gawker says that Ashton Kutcher’s editorship of Details magazine was “a brazenly self interested and highly misleading act of journalism.” He helped produce a special online version of the mag that featured tech companies he’s invested in without disclosing that fact.
Having disclosed it for him—the article is called “Ashton Kutcher Is a Massive Whore“—Gawker now reports on how federal officials are looking over their glasses at the television personality and entrepreneur.
“It’s certainly a possibility that a case like this could be investigated,” assistant Federal Trade Commission director Richard Cleland tells the Times of Kutcher’s Details special online issue, in which eight of 12 recommended products in one article were Kutcher investments. “If you’re out there promoting individual products that you have a specific investment in, it needs to be disclosed… If you have a significant economic investment that is not otherwise apparent, that may potentially affect the credibility of your endorsement, and I see that as a potential problem.” The FTC has made a priority out of online conflicts of interest.
It’s also possible Kutcher violated SEC rules. You’re not supposed to promote a company you partly own—say, in a magazine—if you know it’s soon to go public. And if a company’s shares trade on private secondary markets you must abide by federal rules on deceptive marketing, which a former SEC lawyer told the Times were “very broad… These rules apply any time there is a securities transaction.”
<sarcasm>You see, in the land of the free—where the government’s founding charter says it “shall make no law … abridging the freedom of speech”—you can’t just say any old stuff you want to in a magazine! Say things that help your business interests too much and you are obviously outside of what the quaint old Constitution says. The First Amendment is fuzzy on this. “[M]ake no law” might mean “make a law if you have a good reason.” Duh, Ashton! You’re pretty, but maybe not very smart, saying what you want in the United States of America.</sarcasm>
This episode itself illustrates why “make no law” works despite the fact that it allows sharp business practices. Gawker and other media outlets are actively curing any information deficit with plainly worded articles like “Ashton Kutcher Is a Massive Whore.” This is in aid of the caveat emptor rule, which works even better when people know they need to think for themselves and look for assistance from outlets like Gawker, of which there are an endless supply thanks to the Internet.
Caveat supplicantem if you think that the government is going to protect your interests as a consumer better than you can. Not even close. So there is no good reason for overturning the First Amendment here.
Government Control of Language and Other Protocols
It might be tempting to laugh at France’s ban on words like “Facebook” and Twitter” in the media. France’s Conseil Supérieur de l’Audiovisuel recently ruled that specific references to these sites (in stories not about them) would violate a 1992 law banning “secret” advertising. The council was created in 1989 to ensure fairness in French audiovisual communications, such as in allocation of television time to political candidates, and to protect children from some types of programming.
Sure, laugh at the French. But not for too long. The United States has similarly busy-bodied regulators, who, for example, have primly regulated such advertising themselves. American regulators carefully oversee non-secret advertising, too. Our government nannies equal the French in usurping parents’ decisions about children’s access to media. And the Federal Communications Commission endlessly plays footsie with speech regulation.
In the United States, banning words seems too blatant an affront to our First Amendment, but the United States has a fairly lively “English only” movement. Somehow, regulating an entire communications protocol doesn’t have the same censorious stink.
So it is that our Federal Communications Commission asserts a right to regulate the delivery of Internet service. The protocols on which the Internet runs are communications protocols, remember. Withdraw private control of them and you’ve got a more thoroughgoing and insidious form of speech control: it may look like speech rights remain with the people, but government controls the medium over which the speech travels.
The government has sought to control protocols in the past and will continue to do so in the future. The “crypto wars,” in which government tried to control secure communications protocols, merely presage struggles of the future. Perhaps the next battle will be over BitCoin, an online currency that is resistant to surveillance and confiscation. In BitCoin, communications and value transfer are melded together. To protect us from the scourge of illegal drugs and the recently manufactured crime of “money laundering,” governments will almost certainly seek to bar us from trading with one another and transferring our wealth securely and privately.
So laugh at France. But don’t laugh too hard. Leave the smugness to them.
Independent Agencies Test Tea Party Mettle
Is there something special about December? Perhaps it’s the spirit of giving that had the Federal Communications Commission voting yesterday to regulate Internet service. At the beginning of the month—December 1st—the Federal Trade Commission issued a report signaling its willingness to regulate online businesses.
No, it’s not the fact that it’s December. It’s the fact that it’s after November.
November—that’s the month when we had the mid-term election. The FCC and FTC appear to have held off coming out with their regulatory proposals ahead of the elections because the Obama administration couldn’t afford any more evidence that it heavily favors government control of the economy and society.
There was already plenty of evidence out there, of course, but the election is past now, and the administration has taken its lumps. It’s an open question whether there will be a second Obama term, so the heads of the FCC and FTC are swinging into action. They’ll get done what they can now, during the period between elections when the public pays less attention.
And that is a challenge to the Tea Party movement, which would be acting predictably if it lost interest in politics and public policy during the long year or more before the next election cycle gets into full swing. Politicians know—and the heads of independent agencies are no less political than anyone else—that the public loses focus after elections. That’s the time for agencies to quietly move the agenda—during the week before Christmas, for example.
So it’s not the spirit of giving—it’s the spirit of hiding—that has these independent agencies moving forward right now. It’s up to the public, if it cares about liberty and constitutionally limited government, to muster energy and outrage at the latest moves to put the society under the yoke of the ruling class. Both the FCC and the FTC lack the power to do what they want to do, but Congress will only rein them in if Congress senses that these are important issues to their active and aware constituents.
To Track or Not to Track? That’s Actually Not the Question.
A subcommittee of the House Committee on Energy and Commerce held a hearing last week to consider a proposal, floated in a recent Federal Trade Commission report, for “Do Not Track” legislation aimed at giving Web users greater control over how information about their online activities is collected and used by sites and advertisers. The name is a deliberate reference to the wildly popular “Do Not Call” list, a sort of virtual “No Tresspassing” sign for the telephone, which has spared scores of Americans the annoyance of telemarketers pitching FABULOUS DEALS! and LOW INTEREST RATES! during dinner. Subcommittee Chair Bobby Rush repeatedly invoked the Do Not Call program’s success in his opening remarks. And under the headline “Don’t Track technology is simple, experts say” USA Today declared that a “Do Not Track” policy for the Internet would be even “simpler and more powerful than Do Not Call.”
But as technology researcher Harlan Yu has argued, it’s actually a good deal less simple than it sounds—and the analogy to “Do Not Call” may obscure more than it illuminates. The experts consulted by USA Today are right that a Do Not Track policy would, in one respect, be technically simpler to implement than Do Not Call. It would not be necessary—or, indeed feasible—to have some kind of centrally administered list of people who have opted out of tracking. Instead, the idea seems to be that browsers could incorporate a “Do Not Track” mode which, when activated by users, would send a legally enforceable signal to deactivate tracking in the header of all communications, which would be automatically recognized by sites and ad networks.
What’s not so simple—as the FTC official who testified at last week’s hearing acknowledged—is determining exactly what “tracking” means, who is obligated to listen to the Do Not Track request, and what compliance with it entails. The appeal of a legally enforceable Do Not Track header is that it targets a functional class of behavior rather than any particular technological tracking mechanism, with the goal of ending the “arms race” that characterizes individual efforts by users to safeguard their privacy. So as users learn that they can delete tracking cookies, or block cookies from ad networks using their browser’s privacy settings, the advertisers turn to Flash cookies. When users figure that out, the trackers turn to system fingerprinting or history sniffing. How much simpler for users to simply be able to know they can demand not to be tracked without worrying about whether they’ve anticipated the latest clever method.
There’s the rub, though: There are many different kinds of information sites collect when interacting with users—much of which can be used for tracking, but which is also necessary for other purposes. So, for instance, IP addresses are not a particularly good way of tracking users for behavioral marketing purposes—on many networks they’re dynamically assigned and change frequently, and a single IP may actually represent many different computers and users behind a NAT firewall. Nevertheless, they often will be relatively persistently identified with a particular user—yet it would be utterly infeasible to suggest that sites be forbidden from maintaining their own server logs, including visitor IPs, for any connection that includes a Do Not Track header. Similarly, while sites can collect information about a user’s system configuration for the purpose of “fingerprinting” and tracking, there are lots of other reasons to collect that data—providing browser or OS-specific functionality or a smoother user experience, diagnosing bugs, and so on.
A browser-embedded header may be technically simpler than a government-administered “Do Not Call” list, but “Do Not Call” is conceptually much simpler: A marketer either places an unsolicited call to a particular number, or it doesn’t. When it comes to the information generated by the interaction between a user and a Website, the datastream may be binary, but the question of whether someone is being “tracked” or not is anything but. And as the “arms race” alluded to above shows, it’s not always going to be clear in advance which kinds of information will facilitate tracking. And of course, users will find it useful and convenient to permit the collection of certain types of information even as they prohibit others, making it desirable, as the FTC’s David Vladeck put it in his testimony, for Do Not Track to enable “granular control” by users, rather than a simple on-off switch. But the more types of data collection and sharing need to be controlled—including new types that become prevalent as technology evolves—the more elusive the clarity and simplicity promised by Do Not Track (relative to mechanism-specific self help) becomes.
Maybe there’s a solution to these difficulties—it would be premature to declare it hopeless a priori without seeing a proposed standard. But while the Internet is global, the reach of the FTC is confined to the United States. Even if the arms race could be halted within those borders, many users would frequently—and probably unwittingly—visit sites that are based abroad, or include content from third-party sites that are. (Expect that to increase if legislation gives those foreign ad networks a competitive advantage.) If the sense of security provided by Do Not Track therefore proves to be largely illusory, a more openly acknowledged arms race might be preferable.
When The Government Is The False Advertiser
I had an op-ed in the Washington Times yesterday on government’s growing participation in public-health scare campaigns demonizing everyday foods that are fattening, salty, or thought to be bad for us in other ways. In particular, I singled out Mayor Michael Bloomberg’s New York City Department of Health, which has followed up one scientifically dubious ad campaign on sweetened soft drinks (“What can we get away with?” asked one official) with an even worse — in fact, grossly misleading and manipulative — attack on salt in processed foods:
It shows a can of soup bursting at the seams with table salt, whole mounds and piles of it. The city’s underlying point is not 100 percent off-base – healthful in most other ways, conventional canned soup is a relatively salty food – but the actual amount of salt in a can is more like 1 teaspoon, not the third of a cup or more depicted in the city’s ridiculously exaggerated photo. Not to put too fine a point on it, but the Bloomberg soup ad is built on a visual lie.
What would happen if a private advertiser tried to get away with imagery as misleading as this? Well, in 1970, in a case still taught in business schools, Campbell’s got caught manipulating the soup pictures in its ads; its photographers had put marbles at the bottom of the bowl so that the pleasing vegetables would be more visible on top. The Federal Trade Commission filed a deceptive-advertising complaint to make the company stop.
The FTC’s authority would not extend so far as to ordering New York City to cease its misrepresentations, and for various reasons (including the principle that states and localities ought largely to retain independence from federal dictation) we should be glad it doesn’t. But couldn’t we at least ask that the federal taxpayer not be made to subsidize the false advertising?
Last month, the federal Centers for Disease Control – headed by Bloomberg’s own [former health commissioner Dr. Thomas] Frieden – announced a $412,000 grant to assist the city in its anti-salt efforts.
The full piece is here. Incidentally, via the American Council on Science and Health comes word of a new Harvard study finding that Americans’ intake of salt is almost exactly the same as it was 50 years ago; it also seems that international studies find that people in other countries tend to pursue and attain very similar levels of salt intake. If accurate, that would cast doubt on two key themes of public health alarmism, namely that America is experiencing some sort of epidemic of exposure to salty processed foods, and that such an epidemic underlies rising hypertension rates (which, as the article explains, may owe more to obesity than to salt intake). I could not resist a chuckle at the name of the press outlet reporting the results of the new study: Bloomberg Business Week.
The FTC and Those GM Ads
I’m usually in enthusiastic accord with our friends over at the Competitive Enterprise Institute, but it seems to me they’ve made a mistake by petitioning the Federal Trade Commission (FTC) to crack down on GM’s ridiculous “we repaid our federal loan” ad. Some zealous enforcers would love for the FTC to do more to regulate speech by American business on matters of public concern, and it seems to me the last thing we should do is encourage such a trend.
For those who came in late, General Motors and its CEO Ed Whitmire were widely and rightly assailed here and elsewhere for asserting (in a column whose message was repeated in much-played TV ads) that the company had repaid its bailout loan “in full, with interest, years ahead of schedule.” Actually, as the inspector general of the government’s TARP program readily acknowledged, the firm had merely used one pot of federal money to repay another. Iowa Sen. Charles Grassley helped expose the dodge, and publications ranging from FoxNews.com to the New York Times joined in with scathing coverage.
Yesterday CEI announced that it had filed a formal complaint [PDF] with the FTC urging the commission to investigate the automaker’s ad campaign as misleading. It alleges that the ad campaign “could unfairly dupe consumers into a false, renewed confidence in the company” and that “consumer purchasing decisions can easily be affected by such considerations.” Nick Gillespie at Reason, CEI general counsel Hans Bader, and Todd Zywicki at Volokh have more.
There’s a long history of businesses’ responding to public criticism of their operations or products — and getting in further legal or regulatory trouble because of that very response. In one early case, the FTC went after egg producers for asserting, in the midst of a cholesterol scare that in hindsight appears overblown, that their ovoid wares were not in fact a menace to cardiac health. Sen. Charles Schumer (D-N.Y.) and the Center to Prevent Handgun Violence have asked the FTC to prohibit ads that imply that keeping a loaded weapon on hand will make a family safer. In Nike v. Kasky, a famous case that reached the Supreme Court [Thomas Goldstein, Cato Supreme Court Review 2003, PDF], shoemaker Nike was sued under a California law over the public defense it had put forward of its labor practices in overseas factories. Environmentalists have sought to suppress ads claiming that nuclear power is nonpolluting, and so forth.
Free-market advocates have generally argued that whatever the merits of laws or regulations banning misleading advertising in garden-variety commercial contexts, there are special dangers to the First Amendment and to robust debate generally in letting agencies and courts second-guess the content of “issue ads” and speech on topics of public controversy. To begin with, it encourages advocates to turn to the law to silence disagreeable speech rather than muster their best arguments to rebut it. In one grotesque example, MoveOn.org and Common Cause actually petitioned the FTC to institute a complaint against Fox News over its use of the slogan “Fair and Balanced”, since (they said) the network was neither.
Despite its current dependence on government, GM is in every relevant legal sense a private company, so any precedents forged against it will wind up applying to every other private enterprise that might wish to advertise on matters of public controversy. Which makes it a concern that CEI’s complaint cites with seeming enthusiasm broad FTC interpretations of authority — for example, its authority to suppress speech that might not be in itself false but could leave a potentially misleading impression.
If there is a continuum extending from more or less purely commercial speech (“Our tires last 40,000 miles”) to more or less purely political speech (“Our business is badly overtaxed”), GM’s ad campaign surely falls way over toward the “political” side. CEI’s response to this is to argue that the campaign might influence consumers’ purely economic calculations (as opposed to the political reasons they have to feel angry at GM) by making them more likely to see the company as solvent and thus as capable of making good its warranty promises. The words “strained” and “makeweight” come to mind to describe this argument. Does CEI really want to establish the future principle that a company’s over-sunny talk about its financial prospects will henceforth get it in trouble with two federal agencies, the FTC and SEC, rather than the SEC alone?
It all seems a rather high price to pay in principle for keeping the GM-TARP story in the papers for another day or two.
The FTC on Steroids: Will the ‘National Nanny’ Take Over the Internet and the New Information Economy?
Writing on the TechLiberationFront blog, Berin Szoka warns of the extensive Internet regulation that could come with huge grants of authority to the Federal Trade Commission in H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009.”
Congress is about to reinvent the FTC as the “National Nanny” it was well on its way to becoming back in the 1970s. Today, the FTC is not merely the general overseer of our economy, but the key regulator of the Internet. If the Senate passes Rep. Frank’s bill with its so-called “improvements” to the FTC Act, future generations will look back and wonder why, without even taking the time to consider what it was doing, Congress radically transformed Internet governance as an afterthought to financial regulatory overhaul.
A Free Press Only Counts if It’s on Dead Trees
The Associated Press reports:
The federal government is wading into deliberations over the future of journalism as printed newspapers, television stations and other traditional media outlets suffer from Americans’ growing reliance on the Internet.
With the media business in a state of economic distress as audiences and advertisers migrate online, the Federal Trade Commission began a two-day workshop Tuesday to examine the profound challenges facing media companies and explore ways the government can help them survive.
Media executives taking part are looking for a new business model for an industry that is watching traditional advertising revenue dry up, without online revenue growing quickly enough to replace it. Government officials want to protect a critical pillar of democracy—a free press.
“News is a public good,” FTC Chairman Jon Leibowitz said. “We should be willing to take action if necessary to preserve the news that is vital to democracy.”
Language mavens, observe the lede: The federal government is “wading into deliberations.” I infer that in Newspeak, this may mean something like “trying to spend more money.” Perhaps I should look forward to the federal government wading into deliberations over my salary? (On second thought, maybe not.)
Some of the proposals aimed at saving traditional journalism are relatively innocuous, like letting newspapers become tax-exempt nonprofits. At least this wouldn’t do too much harm, and, given recent performance in the industry, it approaches being fiscally neutral.
Other ideas, like forcing search engines to pay royalties to copyright holders, would have far more serious consequences. It’s hard to see whom this proposal would hurt worse, the search engines, socked with massive fees, or the copyright holders themselves — if search engines don’t index you, you don’t exist anymore.
The surest loser, though, would be the rest of us. Restricting the flow of news for the financial benefit of Rupert Murdoch seems a far cry from our Constitution, which allows Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Burdening search engines seems only to inhibit the progress of science and the useful arts, while enriching a small number of people. It might pass the letter of the law, but I doubt that this is what the founders had in mind.
But anyway…. shame on Americans for our “growing reliance on the Internet”! Don’t we realize that, as the article notes, “a free press is a critical pillar of democracy” — and that a free press only counts, apparently, if it’s on dead trees?
I’m all in favor of the good the press can do, but it strikes me as shortsighted to think that this good can only be done in the traditional media. It also seems foolish to me to think that tying the press more closely to the government will make it more critical and independent. Often, the very best journalism comes from complete outsiders. I’m reminded of Radley Balko’s recent (and excellent) takedown of the claim that Internet journalists are basically parasites:
In 20 years, the Gannett-owned Jackson Clarion-Ledger never got around to investigating Steven Hayne, despite the fact that all the problems associated with him and Mississippi’s autopsy system are and have been fairly common knowledge around the state for decades. It wasn’t until the Innocence Project, spurred by my reporting, called for Hayne’s medical license that the paper had no choice but to begin to cover a huge story that had been going on right under its nose for two decades.
… That’s when the paper starting stealing my scoops. Me, a web-based reporter working on a relatively limited budget. Like this story (covered by the paper a week later). And this one (covered by the paper weeks later here). Oh, and that well-funded traditional media giant CNN did the same thing.
Tell me again, who’s the parasite here? And why should taxpayers bail out yet another industry that isn’t delivering what we want?
Congress Shall Make No Law . . . But Regulators Act Anyway
Lovers of free speech should feel their stomachs turn when they look at the actions of the Federal Trade Commission and Federal Communications Commission these days.
Not that they took a sharp turn with the Obama administration, or with the chairmanships of Jon Leibowitz or Jules Genachowski. These are run-of-the-mill bureaucracies, constantly reaching for new powers, nevermind even constitutional limits on the federal government’s authority.
Item 1: Blogger, You’re an Advertiser Now
Via the L.A. Times blog, the FTC issued a guidance document yesterday requiring bloggers who write testimonials about products to disclose large gifts or payments, or they will run afoul of the FTC’s regulations on advertising.
Is that the right thing to do? Yep. Is that an appropriate thing to require in federal law? Absolutely not.
The FTC is putting itself in the business of guaranteeing the veracity of speech and the honesty and straightforwardness of bloggers. “No” means no law abridging the freedom of speech or of the press.
The “protection” in this regulatory scheme encourages consumers to be supine and irresponsible. State law should deal with frauds as they occur. There should be no law barring or limiting paid endorsements — certainly not a federal law.
Item 2: An Establishment of the Press?
Via the Examiner, it probably didn’t occur to the framers of the constitution to bar the government from establishing its own press, so they didn’t do that in the First Amendment. But we’re heading down that road, and the FTC wants to take us there.
In early December, it will hold a “workshop” called ”From Town Criers to Bloggers: How Will Journalism Survive the Internet Age?”
Here’s an idea for a “workshop”: Taking the Budget of the Federal Trade Commission and Giving it Back to Taxpayers.
Item 3: Just a Modest Takeover of the Communications Infrastructure
As discussed here several times before, FCC Chairman Genachowski has proposed to regulate the terms on which Internet service providers supply broadband services to the public. It’s pretty much the same thing as regulating how printing presses work, or the delivery decisions of newspapers.
The federal government is specifically disabled from regulating speech and the press in the constitution. But in various ways the regulators at the FCC and FTC have talked themselves into the role of censor.
Enough of this unconstitutional consumer coddling. It’s time to shut these agencies down and restore the funds that support them to American taxpayers. Now that would be a consumer protection!
An early version of this post collapsed the FTC and FCC together. Author Jim Harper swears he knows the difference and claims he was briefly blinded with rage at unconstitutional government. Jim thanks the Cato@Liberty reader who slapped him around, getting him focused once again on *happily* railing against unconstitutional government.
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