Thursday, October 08, 2009

FTC Says Bloggers Must Disclose Freebies

Cincinnati-area bloggers, beware: The Federal Trade Commission has codified new guidelines that require bloggers to disclose any freebies, payment, swag, or other gratuities they get when they review a product.

In promulgating the guidelines, which apply for the first time to "new media," the FTC offers the following explanation:

The Commission does not believe that all uses of new consumer-generated media to discuss product attributes or consumer experiences should be deemed "endorsements” within the meaning of the Guides. Rather, in analyzing statements made via these new media, the fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered “sponsored” by the advertiser and therefore an “advertising message.” In other words, in disseminating positive statements about a product or service, is the speaker: (1) acting solely independently, in which case there is no endorsement, or (2) acting on behalf of the advertiser or its agent, such that the speaker’s statement is an “endorsement” that is part of an overall marketing campaign? The facts and circumstances that will determine the answer to this question are extremely varied and cannot be fully enumerated here, but would include: whether the speaker is compensated by the advertiser or its agent; whether the product or service in question was provided for free by the advertiser; the terms of any agreement; the length of the relationship; the previous receipt of products or
services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and the value of the items or services received. An advertiser’s lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an “endorsement” within the meaning of the Guides. Again, the issue is whether the consumer-generated statement can be considered “sponsored.”

Thus, a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement. In contrast, postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.

There's a lot of hysteria in the national blogosphere (particularly in the legal blogosphere), most of which is probably unjustified. Check out PCWorld's extremely layperson-friendly guide to the new guidelines. As the article notes, most bloggers who review the free stuff they receive already disclose the potential conflict. Still, though, local bloggers who get swag (hey Griff: where's my swag?) and talk about what they've received should take a few minutes to familiarize themselves with the FTC's new interpretation of federal law.

Disclosure: I have not received money or other consideration from the FTC, PCWorld, or (sadly) Griff to comment on any of those entities' or individual's merits or shortcomings.

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