Apr

NYT vs. FTC: Is the Times Not Disclosing iPad Advertising?

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The FTC’s blogging guidelines have drawn a lot of attention—but little if any action by the consumer protection agency. But several bloggers think they’ve found a great opportunity for the commission to step in—or a great opportunity to ridicule the FTC’s guidelines—with Apple’s iPad and the New York Times.

Apparently (as you can see), some iPad ads feature the New York Times website including the paper’s logo. Dan Gillmor, for example, has petitioned the New York Times to reveal whether it’s compensating Apple for the use of its logo—a material connection under the FTC guidelines—while reviewing the iPad in its paper.

Other bloggers, TechDirt reports, point out that the Times and other news outlets may have a vested interest in seeing the iPad succeed, if they can successfully use that platform to build a fee-based content system.

We’re all in favor of radical transparency here, but based on reading the FTC’s guidelines (PDF; see section 255.5 on material connections), I’m not sure this is the test case these bloggers are looking for.

First of all, I can’t really see the New York Times getting a huge boost from just having its logo appear on iPad ads (especially if they’re not paying for this placement—I would like to know the answer to that one). Are consumers really so stupid that they couldn’t figure out that when they say you can browse the web, you can also visit the website of one of the most prominent newspapers in the country? Do we really believe the New York Times (again, one of if not the most prominent, well-known newspapers in the country) is going to get more subscriptions or advertising dollars because they got onto an iPad commercial?

The FTC offers specific examples to help (kinda) interpret their standards. From section 255.5, example 3 (emphasis added):

Assume that during [a] television interview, the tennis player [our iPad] is wearing clothes bearing the insignia of an athletic wear company with whom she also has an endorsement contract [using the logo of the NYT]. Although this contract requires that she wear the company’s clothes not only on the court but also in public appearances, when possible, she does not mention them or the company during her appearance on the show. No disclosure is required because no representation is being made about the clothes in this context.

The iPad commercials make no representation about the New York Times, they just display the website. If the NYT is paying to get onto an iPad commercial, they’re not paying for nor receiving an endorsement or any representation (other than visual).

The other issue of the NYT’s reviews of the iPad is a bit trickier. But the general rule goes: if you receive a free product or monetary compensation for a review, you need to disclose it. I assume the NYT reviewers did receive free iPads for review, and that certainly makes it easier to give a glowing review (even if they’re used to getting the latest greatest gadgets for free). But if the New York Times is paying Apple for ad placement, the money is flowing the wrong way.

I’m sure they do hope the iPad will reverse their flagging fortunes, but is that going to change how they review the product (but apparently not the NYT’s David Pogue: “There’s an e-book reader app, but it’s not going to rescue the newspaper and book industries (sorry, media pundits).”). But frankly, that’s a bit more tenuous of a motivation than something as easily measurable as money.

What do you think? Is this the way to demonstrate the absurdity of the FTC guidelines? Or does this just not fit the bill?

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