Legal issues of corporate blogging: First Amendment rights and commercial speech

I’ve just finished reading a quite enlightening article by Robert Sprague, who is an Assistant Professor at the Department of Management and Marketing, University of Wyoming. Here’s the complete reference:

Robert Sprague (2007). Business Blogs and Commercial Speech: A New Analytical Framework for the 21st Century. American Business Law Journal 44 (1), 127–159. PDF from Blackwell

As the title already suggests, the article is concerned with the legal implications of business blogging in the U.S., specifically with the question of whether company blogs always qualify as commercial speech and should thus receive only limited constitutional protection. Sprague argues that the nature of how companies communicate with the public has been broadened significantly through blogs:

A substantial amount of business-related dialogue is beginning to occur on blogs and the number of blogs sponsored by businesses is growing. This increase raises questions about the level of constitutional protection afforded to information contained in the blogs. Speech by businesses has generally been regarded as commercial speech because it has traditionally taken the form of directly promoting a product or service by providing information about that product or service. Modern marketing strategies and recent technological developments, such as blogs, are transforming the nature of commercial speech. Businesses now often communicate with their customers without providing any specific information regarding their products or services. Although commercial speech has received limited constitutional protection since 1975, the commercial speech doctrine has not effectively evolved beyond the notion that speech by businesses is advertising subject to regulation. [...] Modern businesses are using Internet technologies, particularly blogs, to engage in dialogues with the public. The key issue is whether all speech by a business should continue to be relegated to the commercial speech doctrine.

p. 127

In other words, there isn’t really a legal precedent for the kind of communication that companies are conducting via blogs, as it becomes increasingly clear that blogs are used for more than just advertising.

The growth of business blogs, coupled with the unique cultural aspects of the blogosphere, raises a number of legal issues. Specifically, is the dialogue in which a company participates on a blog always commercial speech? Should some business blogs enjoy First Amendment protection or should most business blogs be subject to laws prohibiting false or deceptive advertising or other government regulation? The deceptive trade practices standards are quite low, generally requiring only a material representation or omission that is likely to mislead the customer. The critical issue is whether all speech on a blog that is in any way associated with a business will be considered commercial speech, subject to the commercial speech doctrine in its present incarnation.

p. 134

Even if you aren’t a legal expert it isn’t hard to interpret a material representation or omission that is likely to mislead the customer as a fairly broad category. Perhaps your CEO’s blog is triple-checked by the legal department, but what if you run a few thousand employee blogs? And does documentation, knowledge blogging and communication with stakeholders (say, if you’re a tech company) really constitute commercial speech?

The critical issue for businesses is whether the content in its blogs should be characterized as commercial speech. Companies may express support for efforts to minimize global warming; employees may post messages on a company-sponsored blog about the company’s sponsorship of sweatshop labor; ‘‘product evangelists’’ for a company may comment on various blogs regarding Internet security; corporate counsel for an Internet communication company may post comments about the Chinese government’s censorship of blogs. Whether any of these blog postings would constitute commercial speech merely because they originate or are related to corporate sponsorship is unresolved.
Should the regulated marketplace of products and services, rather than the unregulated marketplace of ideas, be the arbiter of the truth of these blog comments? If the examples listed above are considered commercial speech, then the companies may be subject to scrutiny under laws relating to false advertising or deceptive trade practices, as well as other government regulations.

p. 136

Sprague continues with a detailed analysis of what constitutes commercial speech (the definition is, as one might have guessed, quite fuzzy). Things get complicated quickly, as a case involving Nike shows:

Specifically, the California Supreme Court held that Nike’s statements constituted commercial speech because: (1) Nike, because it is engaged in commerce, is a commercial speaker; (2) Nike’s statements were addressed directly to actual and potential purchasers of its products (a commercial audience); and (3) Nike’s representations of fact were of a commercial nature because it described its own labor policies and the practices and working conditions in factories where its products are made. [...] The case was settled by the parties. As a result, an opportunity was missed to address a critical issue related to commercial speech whether statements made by commercial enterprises which do not directly promote a product or service, but instead comment on social issues and general business practices, are commercial speech.

p. 147

Nike ran an image campaign to meet criticism that was the result of their production practices overseas. The question that remained unresolved was whether such a campaign constituted commercial speech, since one aspect (a product being advertised) was missing from the picture.

The complexity of classification lies in the fact that commercial speech is most often a form of mixed or hybrid speech, including both commercial and noncommercial elements. The commercial element, the primary purpose of which is to persuade consumers to buy goods, may be regulated, while the method by which such speech is communicated is usually considered protected. As one commentator has explained, ‘‘[t]he Supreme Court’s inability to encase commercial speech within unwavering definitional boundaries is not the product of ineptitude, but rather the unavoidable incident of commercial speech’s position at the blurry crossroads of expressive and economic activity.’’ Legal issues regarding the protection of speech in blogs sit squarely within these crossroads. Blogs are a prime example of how new methods of communication have transformed the commercial environment, thereby increasing the difficulty of distinguishing commercial from noncommercial speech. Businesses increasingly combine entertainment, advertising, and public elations efforts in their overall marketing strategies. Advertising the availability or characteristics of a product or service and its price is a method that has been replaced with ‘‘a movement toward viewing communications as the management of the customer buying process over time, during the preselling, selling, consuming, and postconsuming stages.’’ Public relations, promoting a company’s image, is recognized as just one element in the mix of marketing communications companies should utilize. While advertising is designed to be repetitive, persuasive, and focused on specific products or services, public relations efforts generally have a higher level of credibility, as the message may reach potential customers as news rather than as advertisements. Blogs fit the trend toward a broader view of marketing. They are being viewed as an ideal ‘‘forum for conveying the company’s values, attitude, positions and additional content that other communications vehicles don’t.’’ Blogs also have the ability to simulate advantages of word-of-mouth marketing, a form of advertising that many companies find articularly appealing as it simulates the influence of recommendations by a friend or social contact.

p. 149-150

As Sprague observes, if blogging always constitutes commercial speech (and thus has only limited or no constitutional protection), the legal situation in an exchange between the public blogosphere and a company is asymetrical:

Under the current commercial speech doctrine, individuals who criticize a business’ products or services or business practices enjoy a much higher level of speech protection than the businesses they discuss. With the growth of blogs, customers and noncustomers alike have an ever-expanding universe, both in size and influence, in which to publish their messages with near immunity. The U.S. Supreme Court stated in Gertz v. Welch, ‘‘Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.’’ Thus, while false statements of fact do not necessarily deserve full constitutional protection, the Supreme Court recognizes they are nevertheless ‘‘inevitable in free debate.’’ In Gertz, the Court stated, ‘‘The First Amendment requires that we protect some falsehood in order to protect speech that matters.’’ [...]

Under the current commercial speech doctrine, there is no clear classification scheme that effectively delineates commercial speech from noncommercial speech. In effect, any time a business communicates through a blog, it risks being sued on the basis that the public is likely to be deceived.

p. 154

Sprague continues by developing a three-tier system to classify blogs. He divides contributions in corporate blogs into three functional categories:

1. Marketing
2. PR
3. Social Commentary

(if you want a comparison, have a look at my own proposed classification scheme here and here)
In his view the first two types of writing should be labeled as commercial speech, with the limitations in regards to constitutional protection that this entails. The last category, social commentary, should be interpreted as more than commercial speech and thus be covered by the First Amendment. As is always the problem with such frameworks - especially with genres of writing and how to classify them - the million-dollar question is: how do we distinguish between the different types?

Firstly, there’s the question of whether there is such a thing as disinterested, general-purpose social commentary in a company’s official communication. A corporation exists primarily to serve the interests of it’s owners and the core interest is usually to make a profit. If the criterion for Sprague’s social commentary category is the absence of any benefit for the company, it will be very hard to find a corporate blog that neatly fits the category. Any employee blog is potentially beneficial for the company’s image (if it says something nice) and potentially damaging (if it says something bad). And since Robert Scoble we know that it can even be beneficial if it says something bad - the fact that Scoble was free to criticize Microsoft in an official company blog made his employer look more open, responsive and modest. So benefit can clearly not be a criterion on its own, because how exactly a positive effect is achieved when it comes to how a company is publicly regarded is difficult to predict.

Perhaps intent is the key. If there is a conscious, visible intent to sell a product (marketing) or make a company look good (PR) that could arguably be described as commercial speech and treated accordingly. If there is no visible intent and beneficial effects for the company are indirect - say, an employee blogs about his work mixed with personal thoughts and opinions in a way that raises the profile of the company and attracts customers - the social commentary classification would perhaps work.

Sprague suggests that the emphasis should shift from who writes something to what it is they are writing about. That sounds good in theory, but I believe that the best approach is to pinpoint who is writing together with intended audience and communicative purpose in a sort of matrix. The fact that something was written by someone from the marketing department is clearly an argument for commercial speech, no matter the text itself looks like. Following that logic, a sales pitch (1) from a marketer (2) that is clearly targeting pharma companies (3) exemplifies commercial speech, while the review of a TV show (1) coming from a staffing manager (2) that could potentially be relevant to anyone interested in that show (3) does not.

But then again, at least for now, the question of how we classify blogs in a corporate context may just boil down to a known paradigm in law.