What’s worse than sponsored content? The FTC regulating it

[Commentary] What’s more dangerous to consumer well-being, sponsored content or the intervention of the Federal Trade Commission?

The agency held a conference, “Blurred Lines: Advertising or Content,” to “discuss native advertising,” as the New York Times put it. When convening a conference to “discuss” something or other, the FTC (or other regulatory entities) is almost never in pursuit of discussion -- any more than a police officer who says he just wants to talk. Such conversational assemblies usually become venues in which the agency can issue a veiled threat, either directly or indirectly, to its targets, instructing them sotto voce that unless they change their ways they’ll suffer the agency’s wrath. The regulatory playbook usually dictates that the agency promise targets that unless they start observing “voluntary” restrictions, the agency will have to request legislative authority to make restrictions mandatory. Nothing can be “voluntary” if somebody is threatening to make it mandatory, but the gambit works nine times out of ten.

Given the power of the First Amendment, the FTC will have to step more lightly in its legal thrusts against news and information websites than it does against advertisers, whose rights to commercial speech are huge but do not include a right to deceive. Would FTC action encourage advertisers to switch to their own sites rather than fight the regulators, preventing publishers from finding a way serve the mutual benefit of both reader and advertiser? The publication-reader-advertising symbiosis that worked so well for so many decades has obviously broken down, and the flight to sponsored content marks a failure of publishers and advertisers to build something of its equal.