Article on Peer Promotions and False Advertising Law

Ellen P. Goodman of Rutgers--Camden has written an article on how "peer promotions," such as postings on Facebook or blogs, fit into false advertising law.  The article, Peer Promotions and False Advertising Law, 58 South Carolina Law Review (2007), can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1009304.  Here's the abstract:

What many call social media or Web 2.0 applications - podcasts, blogs, and services such as Facebook and Wikipedia - allow individuals to communicate on a massive scale often anonymously or under assumed identities. Businesses are learning to take advantage of these social media to connect with consumers in ways designed to feel authentic and personal. The result is a massive flow of information to individuals, sometimes from their peers, and sometimes from institutions disguised as peers. When the information flow consists of advertising and promotion, it challenges the structure and application of false advertising law, which was designed to manage information in relatively controlled environments where few speakers were capable of mass communication.

This essay offers tentative thoughts on how “peer promotions” fit into the structure of federal false advertising law. In the first instance, it is important to set aside peer promotions that are spontaneous commentary on a product with no connection to the brand owner. These communications are not advertising at all, but editorial comment. Increasingly, however, brand owners themselves create “peer” promotions or adopt such communications for marketing purposes. In these cases, there is commercial speech which, depending on its content, may be regulated.

It is the gray area between brand control and no control where peer promotions most severely strain the application of advertising law and its efficacy. Where brand owners sponsor peer promotions but conceal their involvement, the resulting communication mixes the commercial speech of the sponsor with the noncommercial speech of the peer. The borders of commercial speech have shifted with each innovation in modern marketing, particularly as advertising has become more image-based and integrated into other forms of media content. Mixed peer-advertiser promotions take the blurring of commercial and noncommercial speech one step further and pose more insistently the central question of advertising law: how do we balance the desirability of regulating for transparent commercial communications with the free speech dangers of regulating at the commercial-expressive interface?

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