Your Federal Dollars Hard at Work: FTC Going After Bloggers
Yep, another case of your hard-earned tax dollars being put to good use.The Federal Trade Commission (FTC) just announced that the agency is going to fine bloggers up to $11,000 if a blogger posts a review, endorsement, etc. without disclosing the fact that he/she was compensated to do so. The FTC hasn't updated this policy since 1980 (yep, Olivia Newton John was singing Magic on the radio.) but, for some reason, FTC decision makers decided that now's a great time to step up the policing of bloggers.
So, we have countless bloggers trying earn a little extra money by doing paid reviews, and the FTC wants to clamp down now, during the worse recession since the Great Depression? I really don't have a problem with them updating their policy, but to get fined up to $11,000 is simply draconian. How much does the FTC think bloggers get paid to write reviews anyway?
I don't do paid reviews, but since this recession has hurt my income considerably, I was contemplating jumping into the review game (I have 16 blogs and counting.) Not sure now. I don't mind starting a post with, "I was asked to review XYZ Widgets..." but it seems that the FTC wants me to post something like "Disclaimer: I was paid $56.75 to review this product..." which is just too cheesy.
I once accepted $20 to let someone post an informative article in this blog. The author was simply interested in getting quality links from quality sites. It was a well written article, so I didn't mind. I didn't contribute anything to the piece. Could I get in trouble for that? Hmmm....
For more on this story, click here.
To read the official FTC press release, click here.
Of course, your comments are welcome.
Labels: blogging, ftc, paid_reviews
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posted by Steve Brown | Tuesday, October 06, 2009
10 Comments:
I must admit, I had a very different reaction. I read the guidelines, which does mention blogging a little bit here and there to illustrate points, but is about much more, including celebrity endorsements and so on.
The biggest concern is when companies give significant gifts to get someone to write a positive review. We're not talking $20. We're talking a year at a resort. We're talking the free use of a brand new car for a year. We're talking about free computers, game stations and so on.
If someone famous, whether they are a blogger, or some other sort of celebrity says "I really like product x", I want to know if they like it because someone is giving them large gifts to like it or because they really like it.
Just one question, will that affect reviews of products? As I always review wines, but I am not getting pay for it, in fact I had to buy the wines.
P.S. any chance of exchanging links with you?
I write reviews at a few review sites and usually the rule there is just to add a line to the bottom such as:
"I was given this product in exchange for my honest opinion" or in this case "I was paid to write this review in exchange for my honest opinion"
But being fined 11,000 isn't going to do anyone any good. I don't see who it's protecting either.
The truth will set you free ! :)
Let me expand on my initial comment in light of some of the comments added since.
These are based on my reading of the guidelines as well as comments about the guidelines by bloggers, marketers and officials at the FTC. However, I will add the disclaimer, I am not a lawyer.
If you aren't getting paid to review or getting free samples, the guidelines do not apply to you.
If you say things like "I was given this product in exchange for my honest opinion" or "I was paid to write this review in exchange for my honest opinion"
then you have met the requirements of the guidelines and you don't have anything to worry about.
The guidelines are for anyone making an endorsement or testimonial. Bloggers are barely mentioned in the guidelines. The bigger concern is the big name celebrities. When they make an endorsement, they need to disclose if they are getting paid for the endorsement. Given that they often get paid millions of dollars for such endorsements, a $11,000 fine, which is the maximum the guidelines call for, is actually pretty small.
I've been told that the FTC doesn't imagine any blogger getting that level of a fine.
My personal view is that the fines are likely to end up being on the order of magnitude of $1 for every $100 to $1000 that the endorser is paid or given free material.
If you're getting a $25 bottle of wine given to you, ethically you should report that. However, the FTC is not likely to come after you for that. If you get a free car, that is a different thing, but again, the fine is not likely to be the much ballyhooed $11,000
Again, all of this is based on my reading of the guidelines and writings about the guidelines. As I stated before, I'm not a lawyer, and simply put, better be safe than sorry. Anyway, its the ethical thing to do.
(Side note: According to an FTC official, the guidelines are really nothing more than adding enforcement teeth to the ethics code of the Word of Mouth Marketing Association).
> the FTC doesn't imagine any
> blogger getting that level
> of a fine....
OK, but nobody likes the idea that the FTC can enforce the rule on a blogger if they wish. Allow me to expatiate on this.
Let's say you're a blogger who over the years has written unnumbered reviews in exchange for a modest payment. You then read about this FTC news and you decide to go through all your old posts and add a note to each review, letting the reader know that you were compensated so as to bring all your content into compliance with FTC regulations.
3 months later you find that the FTC is fining you $1,000 because they found out that you were compensated for a review and did not add any language informing readers. This was an unfortunate mistake on your part. You tried to edit all your reviews but you missed one. Too bad, because the FTC wants to make an example out of you.
Is not the above example improbable but possible?
I agree: the big fine is very likely reserved for the millionaire celebrity who was very well compensated for an endorsement. As far as the rest of us: you never know.
It's like the fear of the IRS audit: if you pay your taxes and don't cheat then you likely have nothing to worry about. But the IRS can still audit you any time they want. If you made an honest error with your taxes 2 years ago, and they find the mistake, they'll still fine you, know what I mean, jelly bean?
I've seen some of these reviews (I don't do them myself) and my advice for the little money makers is ignore it. They're not after you.
I was considering it, but now I'm not. This isn't the only reason. I think it annoys people to have to sort through reviews of things that you don't really care about. No matter how good the blogger, if it's done more than once some reader is going to notice a different tone or something. I prefer to review things that I genuinely have an opinion about. However, that big of a FINE?? Ridiculous!
MeCassieMarie.blogspot.com
> I think it annoys people to have
> to sort through reviews of things
> that you don't really care about...
Yes: overdoing it with reviews is a great way to alienate your readers and kill a successful blog.
But how much is overkill? Would one review for every 30 non-review blog entries be overkill? Or would one for every 12 be tolerable?
It makes me sick that money gets wasted in these ways.
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