The Federal Trade Commission is planning to crack down on bloggers who review or promote products while earning freebies or payments, the Associated Press reported Sunday.
This would, for the first time, bring bloggers under FTC guidelines that ban deceptive or unfair business practices.
"New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers--as well as the companies that compensate them--for any false claims or failure to disclose conflicts of interest," the article explained.
The rules could be quite strict, even extending to the practice of affiliate links--for example, a music blogger who links to a song on Amazon MP3 or iTunes that earns an affiliate commission in the process.
The practice of free products for bloggers, most of whom are not bound by ethical guidelines that journalists have historically followed, has been making headlines for some time now. Microsoft, for example, created a wave of bad press a few years ago when it gave free Acer laptops preloaded with Windows Vista to several dozen bloggers.
Some companies have sprung up around the whole notion of blogger compensation and giveaways. The AP article mentions some of the marketing companies that have made a business out of offering bloggers incentives--free trips, products, gift certificates, or outright payments--for coverage. One of them, Izea, has been generating controversy in the tech press since it started PayPerPost.
Izea says that it requires bloggers to disclose what they've gotten paid for or what they've received for free. But with the proposed FTC guidelines, if a blogger fails to disclose a freebie or payment, both Izea and the blogger could be held responsible. The FTC could also take issue with the fact that for at least one promotion, Izea has said it avoided including bloggers who would be likely to give the company negative press.
Izea CEO Ted Murphy wrote in a blog post Monday that the company supports stricter FTC regulations for bloggers.
"The companies that should be worried about these changes are those that have no standards and no way to enforce disclosure," Murphy wrote. "We have invested millions of dollars creating systems that allow us to automate transactions and verify standardized disclosure."
But some bloggers, the AP article mentioned, are concerned that the FTC's efforts could go too far, possibly generating probes into posts that were written without any compensation, and possibly leading bloggers to post with more restraint. And some believe it would be better if bloggers created their own standards based on niche and industry.
Then there's this: does the FTC realize just how many small-time bloggers are out there? Championing business ethics is a worthy goal, but, um, good luck getting much done when there are hundreds of thousands of blogs out there and new ones popping up more or less daily. Ever heard of the expression "herding cats?"
This post was updated at 11:37 a.m. PT with comment from Izea.
President Obama may soon announce former Washington Gov. Gary Locke as his third choice for secretary of commerce.
A White House official who spoke on the condition of anonymity told CNET News it is likely that the president will nominate Locke to run the department. Locke would bring to the position a strong expertise in business relations with China, knowledge of the clean energy sector, and a familiarity with the high tech industry.
"I think Governor Locke would be a great commerce secretary," Sen. Maria Cantwell (D-Wash.) said in a telephone interview. "We've had a strong technology sector in Washington which will be helpful to him."
As governor of Washington from 1997 to 2005, Locke was generally popular and fostered a relationship with Washington's technology sector. He convinced Boeing to locate its 787 jetliner plant in Everett, Wash., with a package of tax breaks.
Microsoft founder Bill Gates donated to Locke's gubernatorial campaign in 1996, and in 1999, he endorsed Locke at a campaign fundraiser, just one week after a federal court declared Microsoft a monopoly.
"In Bill's case the judge's ruling will be overturned, and Microsoft will ultimately prevail," Locke said at the fundraiser. "No company and no individual has done more to empower people, to level the information-playing field, to serve the consumers than Microsoft and Bill Gates."
As governor, Locke in 2000 enacted a package of laws to encourage rural broadband development in Washington. That same year, however, he supported keeping the Internet tax moratorium temporary.
At a time when the president is emphasizing the energy sector's role in revitalizing the economy, Locke would bring experience to the Commerce Department in cultivating a climate for green jobs. In 2002, Locke announced the formation of the Northwest Energy Technology Collaborative, with the aim of positioning the Washington region as a center for research and product development in energy technology markets.
"He has been a firm supporter of technology and clearly understands the issues of climate change and the environment," said Graham Evans, the executive director for the Washington Clean Technology Alliance. "He comes from a state where we have a deep tradition of sustainability in the culture and the way we operate."
Locke will also be able to help facilitate the United States' efforts to collaborate on clean energy technology with China. He has been a partner since 2005 with the law firm Davis Wright Tremaine, where his specialties are China, energy, government relations, and corporate diversity counseling. Locke could help the United States encourage China to lower tariffs on U.S. products, Cantwell said.
"He's done a lot of negotiating on behalf on U.S. businesses in China, and I think he'd be a great advocate for U.S. businesses there," she said.
Leaders from the technology industry reiterated the importance of trade.
"Locke is someone with an outstanding background and a good sense of the value of the high tech industry to the economy and good appreciation for the role that open markets can play in creating new opportunities for everyone," said Dean Garfield, president of the Information Technology Industry Council.
Experience in technology policy will also be important for the next commerce secretary, Cantwell said, since he will have to appoint the next director of the National Institute of Standards and Technology, oversee the U.S. Patent and Trademark Office, and provide leadership on issues like cybersecurity.
Locke was the first Chinese American to serve as a governor in the United States. Before supporting Obama, he served as the Washington co-chairman for Hillary Clinton's presidential bid.
Updated 4:25 p.m. PST with reaction from tech industry representatives in Washington, D.C.
Symantec CEO John Thompson speaking at a 2006 event.
(Credit: Symantec)
John Thompson, outgoing chief executive of security company Symantec, is being considered for the post of secretary of the U.S. Department of Commerce, according to a news wire report on Tuesday.
"He (Thompson) is the leading candidate," Reuters quoted an unidentified senior Democratic source as saying. "He is still being vetted."
Thompson, who announced in November that he would step down in April, held several fund-raisers for Obama at his Silicon Valley home.
"John has always kept his political activities personal in nature and separate from him activities as head of Symantec," a Symantec spokesman said in an e-mail. "He hasn't commented in the past and hasn't been making himself available this time around, either."
Several tech industry representatives in Washington, D.C., said Thompson would be a good choice in the government role, particularly given his experience as CEO of a large technology company.
"He is highly qualified and has the necessary background to be an outstanding commerce secretary and effective advocate for the United States on a global basis," said Dean Garfield, president of the Information Technology Industry Council. "His work on diversifying the corporate ranks bodes well for his willingness to think broadly about advancing our competitiveness on a global basis."
"It's critical to have someone who has experience in industries that are global, competitive, and technology-based. That is what the U.S. economy will need going forward," said Rob Atkinson, president of the Information Technology and Innovation Foundation. "If you look at the commerce choices under the Bush administration, the industries there were oil and gas. Those are not necessarily industries of the future or highly innovative, and in some cases, not even global. It's better if your commerce secretary is from the industries that will be critical to the U.S. future."
Thompson joined Symantec in 1999 and oversaw the company's acquisition of more than a dozen companies, including the $10.5 billion purchase of Veritas Software in 2005.
Thompson, whose mother was a teacher and father was a postman, rubbed elbows with politicians and activists like Jesse Jackson but wanted to keep his focus on growing Symantec, according to 2002 BusinessWeek profile.
As a salesman in the 1970s at IBM, he sported polyester suits, a mustache and an afro hairdo instead of the clean shaven, blue button-down uniform that was universal at Big Blue, the article said.
With annual revenue of nearly $6 billion, Symantec is the largest security software provider in the world.
Obama initially chose New Mexico Governor Bill Richardson for the post, but Richardson withdrew his nomination amid a federal investigation into a state contract involving a political donor.
White House officials declined to comment for this story.
(CNET News' Stephanie Condon contributed to this report.)
The U.S. Chamber of Commerce said Wednesday it is optimistic about the stimulus package currently in the works yet warned that the group may butt heads with Democratic leaders over issues like climate change regulation and energy policy.
"The chamber is very encouraged by the direction the President-elect is taking with his recovery package," Chamber CEO Tom Donohue said Wednesday, as he presented his organization's 2009 State of American Business report and its proposals for economic recovery. "Even so, we will not hesitate to vigorously fight wrong-headed proposals when necessary."
The chamber remains optimistic it can find a workable approach to energy solutions with Congress, said Bruce Josten, the agency's executive vice president of government affairs, even though it does not see eye to eye with the new leadership on the issue.
"Technology's the ultimate solution here," Josten said. "We continue to pass laws promoting the development and acceleration of new technologies, and then we don't fund it and walk away from it."
He cited the Energy Policy Act of 2005, which included incentives for the development of 72 different energy-related technologies. Two-thirds of those have remained unfunded, he said, with the final third underfunded.
The chamber leaders said they expect to see more incentives for energy efficiency in the stimulus package, by way of infrastructure funding.
"We're going to make a down payment going forward, but we're not going to get everything done in one stimulus package," Josten said.
Lawmakers should consider all means of securing affordable, efficient energy, especially given the current economic climate, the chamber said. The United States is the "Saudi Arabia of coal," its report says, and the country should continue to invest in clean coal technologies.
The chamber also recommends Congress facilitate the immediate expansion of nuclear energy.
"It will give us clean power at low prices for a lifetime," Donohue said. "We're going to beat the drum on it."
Donohue argued that decisions about energy regulation should not be left up to independent regulatory agencies like the Environmental Protection Agency. Instead, it should be in the hands of Congress, which can view energy and climate change issues in the context of the larger economy.
"A system run by regulators from the top down that could stop any economic recovery in its tracks is not something this country needs," Donohue said. "It is our belief anything we do about CO2 or to keep people in their jobs ought to be global in nature or use U.S. innovation and technology."
The chamber will not back any particular approach to emissions regulations until it has had a chance to sit down with all the relevant players, he said.
Rep. Henry Waxman (D-Calif.), the new chair of the House Energy and Commerce Committee, is "going to be a challenge," Donohue said.
Waxman advocated for stronger carbon emissions regulations than Rep. John Dingell (D-Mich.), whom he replaced as head of the committee this year.
The chamber is also encouraging Congress to provide more assistance to the broadband industry, starting by funding the Broadband Data Improvement Act, which facilitates the collection of data regarding broadband deployment and establishes a grant program to promote Internet usage. The chamber also supports providing the private sector with incentives like tax credits to build out broadband infrastructure.
The U.S. Chamber of Commerce and other business organizations filed suit against U.S. Homeland Security Secretary Michael Chertoff last week, complaining that the Homeland Security Department cannot legally require federal contractors to use its online worker verification database.
Beginning January 15, 2009, the department will require certain federal contractors and subcontractors to use its E-Verify system, an online database run by the Homeland Security Department and the Social Security Administration against which employers can check a person's work status. Use of the system is voluntary, but President George Bush signed an executive order earlier this year requiring federal contractors to electronically verify their workers' employment eligibility.
The lawsuit, filed on December 23 in the U.S. District Court for Maryland's southern division, asks the court to declare the executive order and subsequent rule changes to be illegal and void, since the president's order is in direct contradiction to the law, which says that no person or entity shall be compelled to participate in the E-Verify program. The only exemptions are federal agencies, the legislative branch, and certain immigration law violators.
Along with the chamber, the plaintiffs in the case include the Associated Builders and Contractors, the Society for Human Resource Management, the American Council on International Personnel, and the HR Policy Association.
The rule change will apply to all new hires for federal contractors with projects exceeding $100,000 and for sub-contractors with projects exceeding $3,000. It also will apply to certain existing employees who were hired after November 6, 1986, but the plaintiffs complained the "relative ambiguity" of the new rules will force many companies to electronically verify all of their employees hired after that date.
While Bush's executive order stated that the new requirement was "designed to promote economy and efficiency in federal government procurement," the lawsuit alleges it will create a "significant expense and time burden" on many of the plaintiffs' member companies. It also says the requirement "increases substantially the likelihood that many of plaintiffs' respective members will face expensive and time-consuming lawsuits brought by individuals who believe they have been discriminated against on the basis of race and/or national origin."
"The DHS intends to expand E-Verify on an unprecedented scale in a very short time frame and to impose liability on government contractors who are unable to comply," said Randy Johnson, vice president of Labor, Immigration and Employee Benefits at the U.S. Chamber. "Given the current economy, now is not the time to add more bureaucracy and billions of dollars in compliance costs to America's businesses."
More than 90,000 employers have signed up to use E-Verify, said DHS spokeswoman Laura Keehner, and the DHS' efforts to provide such programs are reflected in lower illegal immigration rates.
With the free system, "there is little excuse for companies to engage in hiring illegal workers," Keehner said. "This is just another delay tactic."
E-Verify, she said, shows "we have taken seriously the charge to gain back the trust of the American people to enforce immigration law."
Broadband development should not be stifled by federal regulation that intends to make networks more "neutral," the U.S. Chamber of Commerce is arguing through two papers released Monday.
The papers, the first in a series of five that will examine the impact of broadband on certain user groups and for certain purposes, argue that the federal government's current loose regulatory structure has enabled broadband to become a "life-altering tool" both for the general population and for senior citizens specifically.
"An estimated $60 billion has been invested in broadband infrastructure by the communications industry this year," William Kovacs, the U.S. Chamber's vice president for environment, technology, and regulatory affairs, said in a statement. "Given these turbulent economic times, federal policy must continue to support this high-level of investment. This will spur job growth, innovation, and consumer choice."
The lack of Net neutrality laws or other federally-mandated regulations has spurred telecommunications companies to heavily invest in broadband infrastructure, according to the first paper, "Network Effects: An Introduction to Broadband Technology & Regulation." (PDF)
"Moving away from a pro-investment model would halt this organic progress and would have a devastating effect on the U.S. economy, investment, and innovation," it says. "Moreover, policies aimed at management practices are unnecessary and would serve only to chill innovation at the network level and at its edges, resulting in net consumer welfare losses."
Network owners need to be able to manage content flow in order to prioritize important data like 911 voice over IP calls, according to the paper, authored by Charles Davidson and Michael Santorelli of the Advanced Communications Law & Policy Institute at New York Law School. The need to manage networks will only grow as the amount of services offered online grows, it says.
"A variety of proposals have been put forward to regulate the broadband sector under the guise of making the physical infrastructure more 'neutral' to the data flowing over it," the paper says, but such regulations would lessen incentives for investment in broadband and slow the development of content and applications.
The paper recommends legislators focus on targeting broadband funding in regions where it is most needed, reforming the Universal Service Fund, and embracing public-private partnerships to promote broadband deployment.
The second paper, "The Impact of Broadband on Senior Citizens," (PDF) recommends similar support for broadband deployment as well as educating seniors on the usefulness of broadband and expanding their options for getting online. If obstacles for adoption are removed, the paper says, broadband could transform senior life and senior care, just as the senior population is set to expand significantly.
The chamber will later release papers examining the impact of broadband deployment on telemedicine, education, and people with disabilities.
Business leaders discuss promoting IP protection at the U.S. Chamber of Commerce on Wednesday.
(Credit: Stephanie Condon/CNET)WASHINGTON--With only five days left for President Bush to decide whether to sign into law a controversial copyright bill, business lobbyists and even the AFL-CIO are pushing for it to become law.
Most bills to expand copyright law are bipartisan--one aimed at file-swappers and prerelease movies in 2005 comes to mind--and the so-called Prioritizing Resources and Organization for Intellectual Property Act is no exception. Sens. Patrick Leahy, a Democrat, and Arlen Specter, a Republican, are the sponsors, and it enjoys the support of the Recording Industry Association of America.
But the Pro-IP Act is unusual because the Bush administration threatened a veto last month. It's been subsequently amended, and the changes are likely to assuage the administration's concerns, but the U.S. Commerce Department told CNET News that it is still reviewing the revised language.
While industries have been defensively adapting to a globalized economy and game-changing technologies, intellectual property holders are on the offense. The messages from companies like Procter & Gamble and NBC Universal are being carefully tailored to reveal the benefits of bolstering IP protections--whether it's a promise to U.S. politicians of more jobs, better products for consumers, or faster development for leaders abroad.
Industry representatives discussed how to craft those messages, and what obstacles stand in their way, on Wednesday at the U.S. Chamber of Commerce's fifth annual intellectual property summit.
So far, its message to the U.S. government appears to be working. The Pro-IP Act passed unanimously in the Senate and saw bipartisan support in the House.
In the case of the entertainment industry, it is imperative to educate people about "the ramification of (IP) theft to the people who work on the sets, in makeup, even selling concessions"--not just the highly paid actors and producers, said Rick Lane, senior vice president for government affairs at News Corp.
Industries have coordinated their message with union leaders to emphasize that IP protection is, at its core, a jobs issue.
"America's workers are also being victimized by a tidal wave of counterfeiting...and digital theft...(that) threatens the well-being of the U.S. economy, endangers our citizens, and steals our jobs," John Sweeney, president of the AFL-CIO wrote in The Hill, a newspaper ubiquitous around the Capitol.
The message seems to be sinking in not only with congressmen but also with the presidential candidates. Wednesday's panelists see the presidential election's emphasis on green technology as a positive sign.
"That's a recognition of the role of innovation and its tie to the U.S. economy," said Rick Cotton, executive vice president and general counsel of NBC Universal. "This is not a low-cost manufacturing economy--what we have to offer is our innovation."
The need to protect and stimulate innovation is also emphasized with foreign governments, especially those like Brazil that have implemented compulsory licenses, which forces IP holders to grant a state rights to use the intellectual property in question at a set rate.
"We're actually trying to spread that gospel in lots of different countries," said Jon Soderstrom, president of the Association of University Technology Managers. "What we see is people making assertions about the flaws (of IP protection), like hindering the flow of research--none of which is true. The evidence shows it's actually promoting innovation."
Lane said the U.S. should be "using the pulpit of the presidency to explain the importance of IP to other economies."
Creating a favorable environment for IP holders involves convincing consumers as well as lawmakers that IP enforcement is worthwhile.
Encouraging consumers to veer away from bootlegged content simply requires "sending them cues," said Cotton.
NBC has had a great deal of success routing viewers of the Olympics and popular videos like SNL sketches to its own sites.
"That combination of ease of access and the desire of consumers to access content when, and how they want it," Cotton said, "have to go hand and hand, and then we see the possibility of continuing investment."
CNET's Declan McCullagh contributed to this report
An e-commerce advocacy group is fuming over the retail industry's portrayal of online vendors as addicts and criminals and is demanding an apology.
NetChoice.org on Wednesday called for an apology from the National Retail Federation and Joseph LaRocca, NRF's vice president for loss prevention, after LaRocca told Congress on Monday that thieves who steal from retail stores are often driven to crime by the "addictive qualities" of online commerce.
LaRocca's comments came from the prepared testimony he gave during a hearing Monday of the House Judiciary's subcommittee on crime, terrorism, and homeland security. The subcommittee was considering three bills that are intended to combat organized retail crime, a good deal of which takes place online.
In his testimony (PDF), LaRocca said many thieves admit to becoming "hooked" to the ease and anonymity of selling products online.
"When they run out of 'legitimate merchandise,' they begin to steal intermittently, many times for the first time in their life, so they can continue selling online," he said in the testimony. "The thefts then begin to spiral out of control and, before they know it, they quit their jobs, are recruiting accomplices (some are even hiring 'boosters'), and are crossing state lines to steal-all so they can support and perpetuate their online selling habit."
NetChoice is saying that LaRocca and his organization should apologize to anyone who's ever sold anything online for those comments.
"At a time when big companies are looking to the government for bailouts, these entrepreneurs are working to create new jobs, pay their taxes, and build something for their future," said Steve DelBianco, NetChoice's executive director. "They are the true innovators--the hardest working, most productive workers in the world--and they deserve better than to be labeled as addicts and criminals by the mouthpiece for giant retail chains who are afraid of a little competition."
DelBianco, who also testified (PDF) at Monday's hearing, called the bills in question "competition-killing" and "destructive and dangerous."
Three bills were discussed Monday: The E-fencing Enforcement Act would require online marketplaces to retain the contact information of vendors who sell high volumes of items that match the description of stolen goods. It would also require online marketplaces to deny high-volume sellers access to the site if there were reason to believe their goods were acquired unlawfully. The Combating Organized Retail Crime Act also, among other things, requires online marketplaces to collect information about high volume vendors. The Organized Retail Crime Act would make an online marketplace potentially liable for stolen goods sold on its site.
LaRocca said he stands by his testimony.
"The testimony we submitted reflected the sentiments of many retailers that we work with," he said. "It's not to say all sellers in online marketplaces are involved in illegal activity, however, we're finding the ease of selling these products online is luring people into this. It's an issue we have worked closely with law enforcement over, with successful conclusions, however, we feel more needs to be done by online marketplaces."
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