Report: FTC to go after blogger freebies

The Federal Trade Commission is planning to crack down on bloggers who review or promote products while earning freebies or payments, the Associated Press reported Sunday.

This would, for the first time, bring bloggers under FTC guidelines that ban deceptive or unfair business practices.

"New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers--as well as the companies that compensate them--for any false claims or failure to disclose conflicts of interest," the article explained.

The rules could be quite strict, even extending to the practice of affiliate links--for example, a music blogger who links to a song on Amazon MP3 or iTunes that earns an affiliate commission in the process.

The practice of free products for bloggers, most of whom are not bound by ethical guidelines that journalists have historically followed, has been making headlines for some time now. Microsoft, for example, created a wave of bad press a few years ago when it gave free Acer laptops preloaded with Windows Vista to several dozen bloggers.

Some companies have sprung up around the whole notion of blogger compensation and giveaways. The AP article mentions some of the marketing companies that have made a business out of offering bloggers incentives--free trips, products, gift certificates, or outright payments--for coverage. One of them, Izea, has been generating controversy in the tech press since it started PayPerPost.

Izea says that it requires bloggers to disclose what they've gotten paid for or what they've received for free. But with the proposed FTC guidelines, if a blogger fails to disclose a freebie or payment, both Izea and the blogger could be held responsible. The FTC could also take issue with the fact that for at least one promotion, Izea has said it avoided including bloggers who would be likely to give the company negative press.

Izea CEO Ted Murphy wrote in a blog post Monday that the company supports stricter FTC regulations for bloggers.

"The companies that should be worried about these changes are those that have no standards and no way to enforce disclosure," Murphy wrote. "We have invested millions of dollars creating systems that allow us to automate transactions and verify standardized disclosure."

But some bloggers, the AP article mentioned, are concerned that the FTC's efforts could go too far, possibly generating probes into posts that were written without any compensation, and possibly leading bloggers to post with more restraint. And some believe it would be better if bloggers created their own standards based on niche and industry.

Then there's this: does the FTC realize just how many small-time bloggers are out there? Championing business ethics is a worthy goal, but, um, good luck getting much done when there are hundreds of thousands of blogs out there and new ones popping up more or less daily. Ever heard of the expression "herding cats?"

This post was updated at 11:37 a.m. PT with comment from Izea.

[Kwasiowusu]

Is this Comrade Obama's heavy handed attempt to surpress strong criticism of Obama's communist policies by conservative bloggers?
Sounds like the kind of tactics prevalent in African dictatorships like Zimbabwe to me.
Meanwhile, before Obama's FTC begins monitoring bloggers for undisclosed conflicts of interest maybe they'd better start doing the same thing to the traditional media outlets that have thoroughly abdicated any journalistic integrity the past few years.

[Belinus]

How melodramatic. Worthy of Spelling really. I doubt the FTC would crack down on small blogs because chances are companies will not even send them the free stuff or payments anyways. Second chances are it is expanding existing law passed years ago onto the Internet and thus updating it with the times. Or are you of the mind that laws governing things like stalking taking place over the internet and other electronic means is more Liberal Facist Control?

And to be honest, I doubt Obama really cares what conservatives say. The rest of the country doesn't care so why should he? You are probably better off not reading this site but rather WingNutDaily.

[Kwasiowusu]

@ Belinus :"And to be honest, I doubt Obama really cares what conservatives say"

Comrade Obama doesn't care what conservatives say huh?
Hey, he coulda fooled me, given the number of times he keeps whinning about Fox.:

Video: Obama Rips Fox News
http://www.thehopeforamerica.com/play.php?id=1294

Q: Why is Obama Afraid of Fox News?
http://www.floppingaces.net/2009/06/18/q-why-is-obama-afraid-of-fox-news/

Meanwhile, thanks to Comrade Obama's stupid attacks on Fox, Fox's ratings have shot through the roof, destroying the Obama propaganda mouthpieces of MSNBC and CNN combined in the ratings war.
Fox tops CNN and MSNBC combined
http://www.politico.com/blogs/michaelcalderone/0409/Fox_tops_CNN_and_MSNBC_combined.html?showall

This clown has NBC, CBS, ABC, CNN, MSNBC,PBS, New York Times and nearly every media outlet in the country, in his pocket, and he still spends sleepless nights worrying about the one network, Fox, that won''t shill for him and his communist agenda.
Priceless!
Typical thinking of your average African dictactor, who typically crushes any and all opposition in the press, in addition to controlling the state run media. The US mainstream media today is worse than Pravda under the old Soviet Union. Pretty pathetic really.

[Kwasiowusu]

@ Belinus :"Second chances are it is expanding existing law passed years ago onto the Internet and thus updating it with the times"

"Chances are"?
Hey, why don't you back that up by quoting said law then eh?
You just make things up to justify any and all attempts by this regime to supress oposition to it's dastardly policies?
It says clearly:
"New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers ? as well as the companies that compensate them ? for any false claims or failure to disclose conflicts of interest. "
No reference to any law "passed years ago" or whenever here.
This is a clear power grab attempt, and a diabolical plan by Comrade Obama to intimidate and quash any opposition/criticism of him

[cary1]

If conservative bloggers were being paid by GOP to write good things about that dumbo Sarah Palin, I don't see why not stop them

[Kwasiowusu]

@ cary1, you'd love that wouldn't ya?
The loony left of Amerca are for first amendrights rights so far as they are out of power. The moment Democrats take power, they are quick to try and crush all opposition.
If Comrade Obama is so smart , how come he needs a teleprompter for every single press conference he holds, and has to have someone else type in the answers he should give, so he can read it?
Heck, when the Irish Prime Mninster was in theW hite House, Obama even went as far as to read the Irish Prime Minister's speech, instead of his own speech, because his telepromter told him to do it.O bama was welcoming himself to the White House! Chortle!!
Sounds like a dummy to me.

[Random_Walk]

Go figure that a Microsoft fanboy would be among the first to complain...

(Google for "microsoft laptop blogger" and enjoy the show :) )

[Voice_Of_Logic]

@Belinus: Just because the majority of the country like that guy doesnt mean that they're correct. I've always estimated that 85-90% of this nation are fools and sheep at best. I wouldnt put it past Pelosi -- I MEAN Obama, to enact strict guidlines about what can and cant be said. This is why he says nothing about the uprising in Iran, the citizens going against their dictator, but he tells Israel to stop defending themselves against terrorists. Please. Dont try to even tell me that we have a winner in office NOR that we have winners in this latest Congress. They're all going to be fired in 2010 and 2012. My God, I've never seen so many buffoons in positions of power.

[cary1]

@ Kwasiowusu

I would prefer Obama reading from teleprompter over Bush speaking whatever comes to his mind anyday.
[CNET editor's note: Offensive comment deleted.]

[kalel33]

I bet that Kwasiowusu and director blue aren't stating their conflict of interests with working for the GOP by trolling the internet and taking shots where ever they can. Notice the only thing these two talk about is the "bad" Obama and Democrats and have nothing to say about technology......on a technology website. This is just their way to get the word out so they can regain power and it's pretty transparent.

They sound like Rush or Hannity and it's pretty pathetic. Let's hear some more right wing retoric....jk(that's just kidding, because I know you guys aren't on the internet much).

[directorblue]

Well, given the firings of various inspectors general; trying to shove socialized medicine down the throats of Americans despite the bankruptcy of Medicare, Medicaid and Social Security; trying to cram carbon cap-and-trade taxes (estimated to increase energy costs by 48%) down the throats of Americans in the midst of a devastating recession; nationalizing the auto companies and the banks; firing CEOs and dictating executive pay; cowering to a crackpot fourth-world dictator of a starving, bankrupt country (North Korea); remaining silent on an ongoing freedom revolution in Iran (the only time the teleprompter seems to have shut down); well, I guess this is to be expected.

[ewsachse]

Medicare, Medicaid and Social Security are not bankrupt. Get your facts straight.

If you are so gung ho about the "revolution" in Iran, than suit up and help them fight. You sound like a big man demanding action, but are too cowardly to pick up a gun and put your own life on the line.

[siteriver]

Is it possible for conservatives these days to respond to any event of government policy without regurgitating irrelivant rants against Obama? Lets forget for the moment whether these statements have any connection to reality. It does make it incredibly hard for conservatives to be succinct.

What would you like for breakfast?

Well, given that Hussein Obama is nationalizing healthcare and preventing me from choosing a doctor, bankrupting the country and destroying the value of our currency, refusing to stand up to third-world dictators, and creating fake taxes on carbon, I'll have scrambled egg substitute and a short stack. And coffee. That is unless liberals have banned breakfast until everyone has equal access to IHOP.

Seriously, folks. The question was about bloggers and the FTC. Should the government get involved with regulating commercial speech? There is a long history of regulation well-supported by both conservatives and liberals. A prime example is the Uniform Commercial Code, which forms the basis for much of our everyday regulatory laws concerning business transactions. Oh, and before anyone rants about government intervention - the UCC is a private-sector initiative that has been adopted by all fifty states.

A rational argument could be made that recommending modifications to the UCC and dealing with this at a state level would be much more appropriate. Another rational argument would be that for-profit corporations (which are entities created through state law and subject to regulation) cannot "pay-for-play"; with regulations kicking in concerning 'gifts' or rewards over a certain dollar amount.

Regulating bloggers is unreasonable, silly, and in the end unenforceable. Regulation on the commercial side is feasible and should be discussed rationally and succinctly. However, I will listen to conservative opinions on the subject ONLY as long as the conservative in question does not say "and besides, Obama can't regulate bloggers - he isn't even a natural-born citizen!"

[Kwasiowusu]

@ ewsachse :"Medicare, Medicaid and Social Security are not bankrupt"

Huh?
On what planet is that?
Medicare, Medicaid and Social Security HAVE been bankrupt for years

@ ewsachse :" Get your facts straight"

No.
You get YOUR facts straight.

[ModerateVoice]

@ siteriver...

LOL! I enjoyed your breakfast scenario.

[Vegaman_Dan]

We have a CNET blogger here who accepted free room and board from a company in exchange for giving a review of the product. They didn't see any problem with that, even though it is a clear violation of journalism ethics.

I wouldn't have any issues with it either had they actually disclosed that fact publically in the blog posting, but they kept it out of the story, telling me later that it wasn't important. I disagree- knowing now that the particular CNET blogger was accepting these gifts of services from a company makes any and all opinions/reviews compromised now in my viewpoint. They may not be at all in reality, but any time I read their stories, I'll always wonder just what sorts of gratuities they received while covering this or that product/company/service, and how it may or may not have affected their coverage.

Bloggers have long been free of any responsibility for their actions as professional reporters have been trained to be aware of. If bloggers insist on being treated seriously as part of the media, then that means following the same ethics and guidelines.

I'm all for the investigation.

[caroline.mccarthy]

"We have a CNET blogger here who accepted free room and board from a company in exchange for giving a review of the product."

Really? It's also a violation of our company policies, and we are quite vigilant about adhering to it. Was this a full-time CNET employee?

[Random_Walk]

I'm suspecting that Dano-O here is either bluffing, or that his cognitive facilities are running even lower than they usually do. I sincerely doubt you'll get much more than bluster and bluff out of him (or the equivalent of rapidly receding footsteps) if you call him on it in public. ;)

Most pro journalist organizations have a strict code of ethics concerning gifts that one either adheres to, or end up unemployed. This is a given. Bloggers may have to face up to similar codes, lest the gov't do it for them.

[Vegaman_Dan]

@caroline.mccarthy:

This information is available if you can contact me through my registered email account for this username. I will not give that information out in the public as it does not need to be aired here.

@Random_Walk:

Go away kid; adults are talking here.

[magicmaster]

Does FTC tell bloggers to stop receiving free service or product in exchange for reviews? No.

What they seek is disclosure of sponsors when reviewing product or services. Period.

[Lerianis3]

They have no responsibility to do that. Freebie are different than getting paid a set amount per week or month for blogging on a subject.
What we really need is for people in this world to realize that UNLESS A PERSON SAYS OTHERWISE, they are most likely a 'paid blogger'.
I make that clear on LOTS of things that I review, that I am NOT a paid blogger and therefore are going to be more honest, even to the point of being BRUTAL, about a product.

[tomws]

@ Lerianis: "Freebie are different than getting paid a set amount per week or month..."

Check with your tax preparer. The IRS says otherwise.

[Renegade Knight]

@tomws

IRS doesn't deal with the ethical issues of a sponsored press.
Wall street analyssts have been busted pushing out good press on crappy companys and they didn't get free stock. Their pressure came from other directions.

Take CNET. If some big adervtisers says for NBC to jump. CNET's going to have to wrestle with the ethical issue of what that adervtiser is demanding.

Same issue in general. Avoiding the purchase of "postiive spin" for some companies advantage. Doesn't matter if it's free stuff, paid advertising, etc.

[Mergatroid Mania]

Lerianis3: A rose by any other name still reeks.

A bribe is a bribe, wether it is paid weekly, or by giving away hardware, it still reeks.

You're just kidding yourself if you think there's a difference.

[Random_Walk]

The IRS would demand that a freebie laptop (with an obvious value of hundreds, if not thousands of bucks) be listed as gifted income during the tax year when it showed up at your door. Odds are very good that the gifter wrote off the loss on his or her taxes, after all... all it takes is for one audit of either end to have the IRS come busting down the door of the other end.

If you blog and you don't want an IRS microscope being jammed into your rectum, you may want to at least declare the big stuff, eh? The swag I don't think they care about (t-shirts, desk baubles, geek-sticks, etc), but I'm pretty sure they would be interested if you got a free computer and neglected to declare it.

[geekazine]

Everyone needs to be held accountable for their actions. I personally don't take any payments for any of the reviews I do. Then again, I do accept the product. I have a policy in most cases on taking 60 day reviews.

The products I receive usually go back into the production of the site - either as items used or prizes to the listeners. At any rate, Every instance should be known how I obtained the items.

[TX-Sunset]

"The practice of free products for bloggers, most of whom are not bound by ethical guidelines that journalists have historically followed,..."

Hahahahahahahahahahahahahahahahahahahahahahahahahahahahhahahahahahahah!!!!!!!!
<wipes tears away>
hahahahahahahahahahahahahahahahahahahahahahahahahahahah

Journalists and ethics go hand in hand like military and intelligence. I would even lay money down that Ms. McCarthy here has danced across that line more then a few times.

[caroline.mccarthy]

I do know of more sleazy journalists (and people who call themselves journalists) than I'd like to, truth be told. But in the rare instances in which I have been given a product to review (I simply don't cover hardware very often) I've returned it. That's what all our CNET product reviewers do and I think it's a great policy to have.

[Random_Walk]

Personally - I think blogger should disclose the source of their gifts...

For an example as to why, take a read of this:
http://laughingsquid.com/microsoft-sent-a-free-laptop-with-windows-vista/

...and decide for yourself.

[jennifer_BN]

"most of whom are not bound by ethical guidelines that journalists have historically followed"

Why doesn't the FDC make the journalists disclaim the same information. Including who owns the media stations and where their interests lies?

Why doesn't congress disclose their "bribes" from corporations and lobbyists?

Why doesn't the FDC disclose who is really behind their decision to create these type of new rules? Is it the mass media corporations that don't want competition from "civilian journalism"?

Who is really running this country and creating our rules, regulations, and laws? Certainly, not the people or representatives of the people.

As a matter of fact, the people no longer have representatives. The people's representatives became the corporations representatives through open bribery through payments and promised jobs after they finish their elected terms.

It is up to the people to take their country back, no other time in history has the people had so much power as now. These new technologies give the people the power. It is up to the people to use it and the people to start "lobbying" the so-called representatives and make them do their jobs the way they are supposed to.

Don't just sit there, do something. Send an email, make a call, write a letter at the least. Or go to their office and speak to them, gather with protesters, gather a petition.

Make the US the democracy it was meant to be. Give power back to the people by holding the representatives responsible and demand transparency.

[Mergatroid Mania]

Although I agree with what you're saying, if we "Send an email, make a call, write a letter at the least. Or go to their office and speak to them, gather with protesters, gather a petition." then they sick their secret police on you, or cause you credit problems, or sick the tax man on you.

Look, they have all the guns (or 99% of them), and 90% of the worlds wealth. I don't see how a petition is really going to do much against that. I can hear the echos of their laughter now...

[tedmurphy]

I would like to clarify that IZEA is in favor of stricter FTC disclosure requirements.

http://izea.com/izea-favor-stricter-ftc-disclosure-requirements/

Ted Murphy
CEO of IZEA

[macewan_]

Do bloggers still work with Izea since doing so will result in being labeled a Spam site with Google? Losing your Google Page Rank for $1.50 for 200 worded article on your blog seems such a waste.

[Mergatroid Mania]

Good, it's about time.

I have been against blogging for this very reason ever since it started. Bloggers have no ethics rules that are enforced, and there is no way to police them.

I believe that anyone who is a "professional Blogger" (that is, gets paid to blog) should be accountable. If they want the same respect afforded a journalist then they should have to abide by the same rules.

As for how many bloggers there are, not many of them get paid for what they do. Just because you have a blog, doesn't make it well read.

Any blog important enough to have a large following will be easy enough to police.

I believe it's about time there was an ethics organization that all professional bloggers should have to be a member of if they want the same rights and freedoms given to journalists.

[philbarnhart]

Thats right. We can't have those bloggers claiming the same "rights and freedoms given to journalists." I mean, we should not actually expect the Bill of Rights to apply to everyone. Just those special people.

And yes - all those bloggers will be easy to police just as soon as they switch their Twitter profiles from Tehran back to where they really live. Then we'll police 'em good.

By the way Mergatroid Mania, can you please update your profile? Your IP address doesn't match your street address. Or do we need to go waterboard your cable guy again?

[Renegade Knight]

I'm not aware of an ethics organization that all journalists have to be a member of...

[DADSGETNDOWN]

Are they saying if a business wants to give mje a computer because I am a blogger, they can't ?
Or they will only give it to me if I blog about that computer or their prodcuts ?
What am I missing here ?.

[bluemist9999]

It sounds like they are saying "You can get gifts, but if you review the product you received as a gift, you must disclose that fact."

[wkelly42]

So what does this do to book bloggers? Or music bloggers?

I write reviews on one of my sites. PR people send me copies of books (usually uncorrected Advance Reader Copies) and CDs to review. They don't expect them back, so technically I'm getting a product in exchange for a review. Of course, newspapers have been doing the same thing for decades ... Everyone who reads the blog knows how I get the stuff I review - it's on the About page, after all. And if something is pure drek, I tell people. So far this year I've received about $375 worth of stuff (that's assuming Amazon list price for all products, and assuming that a paperback ARC is worth the same as a finished hardback). Is the FTC going to investigate me because I write a positive review of a book that I got for free?? Seems like a waste of resources to me.

And yes -- every dime of that $375 (and however much more I get the rest of this year) is reported to the IRS. They get their cut -- I really think that's what this is all about. The Feds are mad that people are getting stuff and aren't getting taxed.

[iLikeMyiPhone]

Good luck catching me FTC!

[Catalina588]

Oh, and by the way, what is the FTC going to do about spam blog posts? There are at least a dozen quotes with my name and business affiliation having me say absurd things in publications I have never heard of. Or blog posts of six year-old news where the quote has lost a bit of timeliness.

[bitsofbeauty]

Ok, first off. Why did this turn into a conversation about Obama and political parties. Shut up about that stupidity. Can we get back to the point. I want to know if the FTC is going to stop magazine's who have blogs from receiving samples to review. Really? Magazine sales are falling badly, but you want to know what is high up? Their blog readership. There is a reason that Anna Wintour forced Andre Leon Talley to start blogging. Nearly ever major company has it's own blog, so are they going to regulate posts that just so happen to mention products by their advertisers? I think not. That would be stupid. You couldn't run a publication that way. At fashion week, blogs are quite often put in the press section. I blog and I'm on press lists. That means I get samples to review. I have advertisers and sponsors, which I don't make much from now, but I know bloggers who do. Most of us handpick our sponsors and advertisers, much like paper publications have standards for their ads. I give honest reviews, and just like a magazine or any other publication, it should be up to my readers to decipher whether or not my content is good and honest. Design, Fashion, and Beauty blogs are dependent on the ability to receive samples and review them. We can't afford to pay for all those, and if we did have to pay or spend the time collecting the samples ourselves, we'd be less likely to discover new products and to give an honest spectrum of reviews. Blogs vary in format and content just as much as any other form of media. If some company gives a free preview to Ashton Kutcher or Gwyneth Paltrow (who by the way has a very good blog) and they start tweeting and blogging about the product, are they going to be regulated? Furthermore, when they are paid to be spokespeople for the product, then go on air during their own interviews pushing it and doing the same on their online media, are they going to be regulated? Is the FTC going to go after them? I mean, it's not like that scenario never happens, right? Are you telling me that companies should pay big bucks for product placement in shows and movies, give out swag to celebrities, and send samples to magazines, but they shouldn't to bloggers? Give me one good reason why that makes sense?

Fine, you want some sort of disclosure? Most of us with affiliate or content based targeted advertising are required to put some sort of privacy policy in place. If we have ads or receive samples, perhaps there should be a section (or for the less tech savvy, a widget) that allows a disclaimer on this. That really should be the limit.

As far as the kind of payment and gifts/samples/in-kind payment we receive, if it is from our advertisements, like banners, don't touch it. If it's about product endorsements or posts reviewing a product, treat us like any other member of the media. Treat each blog like it's own media outlet and make us adhere, at most, to the rules that the rest of the media has to.

The truth is, I've seen a huge amount of small businesses grow from blogging. It's offered small designers, decorators, shops, bakeries, and so many more to have a chance at some exposure. Too much regulation could kill that.

[Heebee Jeebies]

The only thing bloggers and other news sources should have to do in regards to receiving things from companies is state what they got and whether it was free or discounted. This information and this information alone coupled with information from other sources will provide people with enough information to decide for themselves how much weight to give the information they have read.

ANY ONE that reads one source of information on anything and trusts it with out for checking is a moron. Blogging at best is akin to user reviews of sites like Amazon.com. They are but once source of information and should never be relied upon as the only source of information about a company, product or service. Opinions are opinions and are always suspect.

Lets go for an example. Download.com and cnets reviews on their. I have that more often than not in my opinion just aren't accurate and very seldom jive with the user reviews. Even major organizations like the New York Times, CNN, etc. should only be trusted as far as your own research says they can be trusted. Bloggers are the same way except I think much more suspect even when they don't get products or services. They tend to be much more biased and opinionated, they have much more feeling about what they are writing about. Take the woman being shot through the heart in Iran, bloggers are much more emotional and intense about this than any of the news organizations, bloggers have strong opinions, news organization tend to state the information with all of the emotion an feeling of a robot. Both are great, but our government has no right to do more than to state how they get the products or services they talk about. That is it. These are not legit news organizations I don't care how professional the writing is. 99.9999% don't have press credentals and without those the government has no right to interfere.

If companies don't like the information shared then maybe companies need to be less greedy and more customer/consumer friendly otherwise I think they get everything they deserve. As for the readers if they aren't smart enough to read and understand what is being said and the tone that it being say in that is there problem. The government doesn't need to dumb things up for the small percentage or morons that managed to get on the internet. These would be the same people that buy those check stand rags telling us that the Mars Queen just had Elvis's baby.

[texasheartland]

What people don't realize is that small blogs (especially those owned by mothers and/or just regular people like me) don't really receive ANY compensation except for the products received in which we review. We aren't journalists and if we aren't self-hosted, we are still bound by the host's TOS. Even if they are self-hosted, almost 100% of the bloggers I have contact with follow their own strict guidelines so they don't cause a "conflict of interest". This has been happening for years and the FTC finally wants to do something? Good luck on getting it done.