Subverting New Media for Profit: How Online Social Media Black Markets Violate Section 5 of the Federal Trade Commission Act

Authors

Peter Touschner

Abstract

Social media can be broadly defined as a category of sites centered on user participation and user-generated content. Prominent social media sites include Facebook, YouTube, Delicious, Digg, Reddit, and Twitter. In the U.S., interaction on such sites accounts for nearly a quarter of all time spent on the Internet, topping email and games as the most popular online activity. Given the rise of social media and its increasing influence over consumer market choices, a few firms have sought to game social media systems by setting up "black markets" for social media votes and actions. These firms act as middlemen, charging advertiser partners for specified social media outcomes-such as a certain number of votes that may result in prominent placement on a social media site-and paying real, otherwise legitimate, social media participants directly to achieve those results. This note examines Section 5 of the FTC Act, the FTC's Policy Statement on Deception, and the newly revised FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising as they relate to such undercover social media marketing techniques. It argues that Section 5 is broad enough and flexible enough to encompass social media "black markets" in its definition of "unfair or deceptive acts or practices in or affecting commerce."

Recommended Citation

Peter Touschner, Subverting New Media for Profit: How Online Social Media Black Markets Violate Section 5 of the Federal Trade Commission Act, 3 Hastings Sci. & Tech. L.J. 165 (2011).
Available at: https://repository.uclawsf.edu/hastings_science_technology_law_journal/vol3/iss1/4