Here's the deal, in case you haven't been keeping up: Ashton Kutcher, the dumb guy from "That '70s Show," is a big-time tech investor on the side. Details magazine asked him to guest-edit a special digital issue about "The New Titans of Tech," and Kutcher used it as an opportunity to promote a bunch of companies he either holds stakes in or advises, like Flipboard, Foursquare and AirBnB. Now he might be in trouble with the FTC and/or the SEC.
Let's be clear here: Kutcher's logrolling was cheesy and a little sleazy. Details' willingness to let itself be used was pathetic. That said, the whole sad mess illustrates how conflicted and, often, futile is the effort to prevent celebrities from using the power of their endorsements to line their own pockets in ways that mislead consumers.
I'm going to focus on the FTC's piece of this, since it's an angle I've covered frequently in the past. The agency has the power to regulate endorsements and testimonials, and requires that material relationships affecting the credibility of those endorsements be disclosed, a requirement that was more or less ignored here. Two years ago, it updated its guidelines to account for the growing importance of blogs and social media platforms as venues for endorsements.
Since then, however, it's become abundantly clear the new rules still contain loopholes you could fly a 747 through -- loopholes that are plenty relevant here. For one thing, the guidelines for some reason draw a distinction between old and new media, with the latter required to hew to a higher standard: "The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media." Is an online-only issue of a print magazine traditional or new media? I don't know, but if I were Kutcher's lawyer I'd certainly make the most of that ambiguity.
Similarly, the FTC has said that celebrities may be subject to a looser standard of disclosure than non-celebrities since everyone in our culture pretty much knows celebrities are swimming. That sounds cynical, but it's practical. Otherwise, the agency would technically have a potential enforcement action on its hands every time some starlet tweeted about her favorite boutique or raved about a restaurant meal.
Kutcher's situation is slightly different since his material relationship to the companies he pumped in Details -- and that, by the by, he plugs all the time with no regular disclosure in his massively popular Twitter feed -- is a lot stronger than a few comped meals and gift bags. But that cuts both ways. Full-time tech executives and VCs blog and tweet all the time about companies they have stakes in. We expect it of them. Indeed, if Fred Wilson weren't talking up Foursquare, there'd be something weird about that.
These days, Kutcher spends as much time sitting on panels at tech conferences as he does acting. The FTC could say he's improperly using the fame he gained as an actor to benefit himself as an investor, but who's to say it's his acting rather than his investing that made him so popular? Has anyone at the FTC ever watched him act? He's pretty bad.