Bloggers beware: the FTC is watching

Do you blog? Are you trying to make money with your blog by promoting some company's products or services? If so, you  better be careful because the Federal Trade Commission has its eye on you.

The FTC recently issued the first revisions to its advertising practices rules in nearly 30 years, which is amazing in and of itself. (Did nothing about advertising need fixing over the last three decades? Really?) What is interesting about the new rules is they are the first to actually address those engaged in non-traditional media, such as blogging.

The rules require advertisers to state typical results when they make extraordinary claims. So this pitch, "Drinking this weird, synthetic milk-like substance that only a chemist could love, Jane lost 30 pounds in seven minutes," would require an additional comment along the lines of, "typical weight loss is one pound per decade." Failure to add this kind of qualifier would leave the advertiser open to lawsuits.

Well done FTC. Better late than never. Of course, some advertisers are all mad and bent out of shape over this ruling, which is hardly surprising given how many of them play fast and loose with the truth. I, for one, cannot believe the nonsense being put out by the hordes of companies pushing Acai berry products. If you were to believe their claims the mythical fountain of youth has nothing on these berries.

Anyway, what about those new media wonks?

The FTC was concerned about bloggers who receive compensation (in any form) from the companies whose products they review or otherwise discuss. Basically what the FTC got its bureaucratic panties in a wad about was bloggers shilling for clients and failing to disclose the baksheesh.

The new guidelines declare that bloggers who fail to disclose "material connections" to companies they write about can be fined … wait for it … up to $11,000 per violation! Wow.I asked Julie O'Neill, a former staff attorney for the FTC in the New York regional office and now an attorney in the Washington, D.C., office of law firm Morrison & Foerster, about these new rules.

My first question was whether these rules are fair, rational and enforceable. Julie responded: "I do think that they are rational in the sense that they apply the rules traditionally applied to advertising to new media, but I don't know whether the FTC has completely considered the practical ramifications. For example, the revised guides say that a company that provides a blogger with a free product to review should both require the blogger to disclose that he received it for free and have procedures in place to monitor his postings for compliance."

Julie explained that this monitoring for compliance “presumably means that the blogger cannot make any claims about the product that the company would not be able to make itself. These requirements may be difficult to implement in practice and deter companies from seeking product reviews from such individuals."

Given that blogging covers a wide range of sins I asked Julie how the FTC defines a blogger. Julie replied: "There's no set definition. Rather, the guides cover any person, in any medium, who provides an 'endorsement' (i.e., an advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser). This broad approach permits the FTC to apply the guides to any 'endorsement' in any medium."

Julie pointed out that the FTC says that "bloggers may be subject to different disclosure requirements than reviewers in traditional media. Specifically, published reviews by an employee for a newspaper, magazine, etc. that has independent editorial responsibility are not considered to be 'sponsored' advertising messages and are therefore not 'endorsements.' (If, however, the reviewer were receiving a benefit directly from the advertiser, this analysis could change.)"

In other words the ruling applies to anyone posting anything anywhere unless they are the likes of my colleague Keith Shaw over in Cool Tools or myself over in Gearhead writing for the likes of Network World.

For the rest of you, should you post a comment in a forum somewhere saying Brand X Acai berry juice will cure cancer and stop wars and are in any way compensated by Brand X and fail to make that clear, the FTC is gonna git you. Bloggers, you have been warned.

This story, "Bloggers beware: the FTC is watching" was originally published by Network World.

Copyright © 2009 IDG Communications, Inc.

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