FTC to bloggers: Fess up or pay up
Independent bloggers who fail to disclose paid reviews or freebies can face up to $11,000 in fines from the Federal Trade Commission, according to revisions to the agency's "Guides Concerning the Use of Endorsements and Testimonials in Advertising" published Monday.
This marks the first time that the Guides document has been updated since 1980.
"The revised Guides also add new examples to illustrate the long standing principle that 'material connections' (sometimes payments or free products) between advertisers and endorsers--connections that consumers would not expect--must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other 'word-of-mouth' marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service."
The FTC also has its eye on celebrities. "Celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media," the release explaining the revisions explained.
That means, theoretically, that if a celebrity gushes about a new car on his or her Twitter account and it turns out that the car was given away for free, the celebrity could be fined by the FTC.
Word of the FTC's crackdown on blogger endorsements first broke in June and set off a wave of chatter in communities of bloggers who are well used to receiving and keeping free products from marketers and PR agencies--most notably the thriving "mommy blogger" sector.
It's going to be hard to police--there are a lot of bloggers out there, not to mention a lot of different kinds of bloggers, and a lot of marketers. And as some media critics have pointed out, undisclosed endorsements of freebies have plagued some sectors of the magazine industry for decades now.
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline. 
@Random_Walk: Your troll attempt is humorous at best, They all do it, even your beloved Apple.
I can safely assume the same thing vis-a-vis Microsoft's past action in that regard, but you and I both know that such things still go on. How on Earth is the FTC going to be able to track it, let alone act on it? Why should the corp care if the shill gets busted? It's not like Joe Sixpack would pay any attention, or that CNN would bother reporting it to them...
@ all else:
Sorry, but you and I both know that it did happen, that it will likely happen again, and that this time around there could be legal repercussions atop the ethical ones that already exist (at least if someone snitches). Notice that the bloggers who got the Acer/Ferrari laptop and gave it away (or sold it and gave the proceeds to charity) are largely still around. Those who weaseled and basically kept their little gift (or sold it and kept the money, or got caught lying about what they did with it, etc) have basically faded into obscurity.
One would think that being outed as a shill would have been sufficient punishment, especially in a realm where one's reputation is one's currency. History has somewhat proven this (except at the professional realm, e.g. Rob Enderle and his ilk). OTOH, this adds a delicious little twist that I believe at least get the bloggers to thinking before deciding to keep their sudden windfall.
Question is, what about the company that actually does the astroturfing? After all, they can simply do it again (and again, and again) without repercussion.
(and dear Dogg, please back up your assertions... I'm dying to see what you can invent to 'prove' that whopper).
It is extremely common for hardware manufactures to give out demo units, otherwise a website who does product reviews would be broke from constantly buying new hardware.
I love this line btw. "One would think that being outed as a shill would have been sufficient punishment, especially in a realm where one's reputation is one's currency." And yet you still post on here . . .
show me where I wrote any such thing. Oh, wait, you can't.
Next?
==
"http://reviews.cnet.com/desktops/apple-mac-pro-two/4505-3118_7-33541093.html one quick search of an apple review unit from cnet."
Review units gained by a professional news org have to be returned (as I've mentioned before) - now let's see you prove that CNET doesn't return them.
Also, your second cite is certainly not by a pro news org (what part of that isn't sinking in for you?)
"It is extremely common for hardware manufactures to give out demo unit[sic]"
No kidding? Gee, in all that mention I made of manufacturers sending out demo units for reviews, I must have somehow missed that factoid.
"And yet you still post on here"
To quote Paul Reubens: "I know you are but what am I?" ;)
Come back when you have something substantive and not so bile-filled, mm'kay? Thanks in advance.
Listen up. When I read a review of something, I want to know if it's a real actual review, or just another ad disguised as a review.
Have you ever heard of the term "conflict of interest"? Maybe you should read up on it. Convincing someone to buy something through a gushing review that was actually paid for is a lie. Lying to get someone to get them to buy something is fraud. Not disclosing that you got free stuff or a cash payment from a company to review their product is the same as lying about it.
They're not asking for bloggers to stop receiving items nor payments. They're just asking them to disclose the fact. It's not a big deal and helps to keep everyone honest.
You have a problem with honesty? You think it should be OK to lie to people to get them to buy a product? Because we ALL know, if the government does not step in to keep people honest, then the lies will abound period. There are too many dishonest people out there that we have to have the government intervene to keep them honest.
Perhaps you have a better way? How about this, we find the people who lie about their profiting from reviews and stick their a$$es is prison. How about that, is that better? Maybe not. A better way might just be to have them disclose the fact they are profiting in some way so we don't have to get so extreme.
Police state...my god, grow up.
Most pro media organizations have strict guidelines on demo and review units - they have to be returned, they have to be accounted for, and nobody gets to take one home.
On the manufacturer side, there are strict rules as well if the corp is worth a damn. My previous employer, Intel, had some very strong policies on their side of things as well - their demo units were strictly accounted for and counted as units made the rounds to various reviewers and such. They expected to see demo units/parts/etc return whole each time, as much to prevent any accusations of astroturfing as for budgetary and fiscal reasons.
Why? All conflicts of interest should be disclosed as a matter of ethics. If we want bloggers to enjoy the same freedom of the press as the traditional press does, they need to hold the same standards.
That said, once they are getting freebee and paid for their work they have entered the rank of the pro's and should be accountable as a pro. Mom blogging about her kids soccer game or other trivia shouldn't be held to the same standard.
What are you trying to do, redefine the word REVIEW?
Disclosure requirements have been around for ages. Why should we remake the rules for bloggers?
I don't know about you, but when looking for a review of a product I always try to find an independent review so you know you'll get a true opinion. If no one discloses that they are profiting from the review then you can't tell the difference between a paid for preview of an item and a true opinion in a review of the item.
Do you go to a WB or Sony site for a review of a movie before you go to see it or do you go to an independent site for a review from someone who's not paid by the movie studio? If no one is required to disclose that the studio is paying them, how would you know if it's an honest review?
You shouldn't have to always assume someone is being paid for their comments. You should be able to trust that the information someone is giving you is their honest opinion unless they say otherwise.
There is no harm in a celeb saying 'lotus gave me this ace car, and i love it' - rather than 'my lotus is the best car'. What it does is return power to the consumer to then make an informed decision. That is what the role of government is, to protect public interest. If you hadn't noticed, the idea of democracy is about what the public want and need, ergo lets not protect a deceiving individual and instead protect the masses.
It is indeed going to be hard to police. I guess the FTC will focus on more higher trafficked blogs and user accounts on social media sites.
BTW - I'm not paid to endorse anything but I'm plugging Cnet. :)
I also think that you should automatically assume that someone is being 'paid to blog' unless they start bluntly otherwise.
@Lerianis no- people didn't 'see' what the administration was doing and said, "oh that's ok, it is in my best interest." No, the people saw that the administration didn't give two hoots what the public thought - they proved that by rigging the election. From an outside point of view (ie. i have no vested interested in loving or hating a particular government in the US) the Bush administration bordered on totalitarian dictatorship and there were many in the international community that was wondering why the UN didn't act/protest or at least refuse to acknowledge the government as legit - considering when this happens in "lesser" nations, we call it a coup (not a military one sure, but certainly one gained via corruption). I only hope the new administration has the guts (and capacity in terms of power in the senate etc) to reverse some of the appauling breaches of civil liberties that are against the public interest.
In summary: Asking an individual to be honest to protect the public is different to spying on the public enmass under the guise of protecting the public.
I can see it now: (an obvious but pertinent example of hilarity): A man 'finds' a spoon on the ground, out in the woods and it's made of pure diamond. So the man writes on his blog about how wonderful this "FREE" spoon is and how he can dig holes in solid rock with it. Now what difference does it make whether the manufacturer, a friend, or anyone else "Gave" him the spoon or whether he found it as he claimed? In either case the spoon was FREE. Overzealous, tyrannical, government now wants blood because he didn't "buy" the spoon "fair and square" and THEN wrote his article on the great new spoon he bought.
None of this makes sense. In ANY case, he has the absolute 1st Amendment right to write whatever the heck he feels about the spoon whether he bought it, found it or it was given to him. Afterall, isn't posession 99% of the law anyway?
What in the HE!! is wrong with these people?
Some blogger needs to start writing reviews on how well certain 'tools' can be used quite effectively to 'solve' some of this insanity once and for all. LOL
Forwarned is fore armed. In other words Caveat Emptor works best when you have full information. Rather like listening to your stock broker analyist only to find out they were working for the other guys and not you. Had you asked them (practicing that Emptor thing) they would have said (lied) they worked for you.
Do you think Nancy Pelosi and the other control freaks care one bit about the "Constitution", "Bill of Rights", or "individual freedoms"? Those are just unfortunate obstacles to imposing their will.
Laws ask for what would a 'reasonable person' expect. I think a reasonable person would expect that if you're getting a kick back for saying something is great that you say so. It doesn't invalidate the opinion, it merely contextualises it.
I am not an expert on the US constitution by any means, but I am not sure there is anything there that endorses the idea of deceiving the public in bad faith to make a buck...
So what happens when TWO bloggers write the exact same story, one was paid the other was not, but the guy who was paid licenses his copyright in the written work to the one who was not paid?
Sounds like both a double standard and another case of Unconstitutionally treating two people differently for essentially the same act. But one is treated as 'illegal' and the other is not. It's called: Equal Protection.
I don't want to read a paid ad in a blog.
But, then, I don't read blogs gushing about products without assuming they've been paid to write it, either. So given that assumption, it's only fair that the FTC would regulate it. Free speech or not, if someone got paid for writing a positive opinion of an item, that opinion is tainted. Even with full disclosure.
Caveat Emptor is a baseline for caselaw for a reason. Otherwise, who wants to read/sign a practically endless contract just to purchase a spoon?
From Dictionary: "The axiom or principle in commerce that the buyer alone is responsible for assessing the quality of a purchase before buying."
With Renegade's and the FTC's logic, the Blogger can now (likely) be held responsible for the satisfaction/dissatisfaction of a buyer of a product because the Blogger said it was a good product.
Fraud and deceipt are not part of the whole 'good faith' part of an agreement between two parties. Lying to make a sale is not good faith. It is called misrepresentation. There are already laws that protect the public from this in most areas (eg false advertising etc).
And please, your car dealer example is so dodgy - a reasonable person could assume a ford car dealer works for ford. The problem is when some celeb says the car is the best ever without disclosing that he/she works for ford too.
Actually, it's not a lie if the review is truthful. The problem lies in that readers don't know of the possibility of bias, intentional or otherwise, unless the "conflict of interest" is revealed. And there is ALWAYS bias in these instances. No matter how even-handed an review tries to be, the fact that he or she is receiving some form of compensation will cause them to issue a more facorable review; even if it's something as innocous as word order or synonym selection.
The word lie may have a particular meaning but many would agree that witholding information is the same as lying in that both are deceit.
Caveat Emptor. The U.S. really needs to grow up. Soon the country will be Britain..what a nightmare. ID to buy a spoon anyone ?
Now if the blog is an advertisement, that's a different story. The FTC has authority to regulate advertising, but it is going to be difficult to enforce when bloggers don't mention they are being paid.
I just wish this was the biggest issue facing the world.
Just read a very insightful column on this by an analyst at Basex - worth taking a look.
http://www.basexblog.com/2009/10/05/ftc-to-bloggers-disclose-payments/
(Note to the Coca-Cola Company: I'll just assume your check is in the mail)
- by PaulLevi October 6, 2009 11:32 PM PDT
- Here's my take on this issue http://paullevinson.blogspot.com/2009/10/ftc-wrong-to-regulate-deceitful.html
- Like this Reply to this comment
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