FTC to Regulate Blogger Claims (I was Not Paid to Say This)

by on October 6, 2009 · 16 comments

Should the federal government regulate what blogger’s blog? Yes, said the Federal Trade Commission yesterday — at least when it comes to product endorsements.

At issue were the FTC’s guidelines concerning the use of endorsements in advertising. These guidelines, among other things, require paid endorsers of products to disclose their relationships with advertisers. The goal is a good one, to prevent deception and fraud. In practice, the lines are hard to draw — what exactly is an endorsement? What constitutes payment? It gets even harder in today’s world of user-generated media, in which much advertising is by consumers themselves on blogs and elsewhere, sharing recommendations and opinions on just about everything.

In revisions announced Monday, the FTC explicitly extended the rules to blogs for the first time. Perhaps more importantly, it did so even for casual bloggers with only the slightest compensation from the seller. Here’s an example from the guidelines:

“A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. Because his review is disseminated via a form of consumergenerated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.”

In effect, the blogging college student is pigeon-holed as a paid endorser, even though he hasn’t been paid to say anything in particular, and only receives what looks like rather common promotional material.

He likely doesn’t even see himself as an endorser of any kind, he just writes his opinions, which others find useful. No one is hurt. Yet, unless he discloses that he got the video — gasp — for free, he may find himself facing fines from Washington.

Its a classic example well-intentioned rule taken too far. And not only are consumers hurt — as product recommendations from other consumers are made scarcer, but free speech itself is chilled as individuals become less willing to put virtual pen to virtual paper out of fear that they may violate some obscure federal rule.

It is a decision I cannot endorse.

[10/7 update:  An astute reader noted that the blogger in the illustration above received a "video system," not a "video," a much more valuable item.   Nevertheless, I remain troubled by the guidelines application.]

  • http://twitter.com/cordblomquist Cord Blomquist

    James, you beat me to this topic! Very good post.

    Anyone care to guess how quickly this will be struck down in the courts as a violation of the 1st Amendment?

  • dm

    I think the proposed fines are draconian, but “these comments are based on a product that manufacturer X sent me” is pretty standard practice among the blogger-reviewers I follow — I even know bloggers who refuse such gifts.

    In your argument you make a bit of a jump from “video game system” to “video” (that is, from a $200 gift to a $10 one). Either one rates a comment, and yes, should be mentioned by the reviewer.

  • bobexample

    To say product recommendations dry-up is either wrong thinking or a scare tactic–I prefer to think you are stupid than a demagogue.

    A reviewere would just put
    “They gave me the game to review”
    in the review and be done with it.

    Takes 10 seconds and costs nothing.

  • dm

    It's not clear that it's any more chilling on speech than, say, libel laws.

  • cryptozoologist

    thie disturbing thing about this to me is it seems to run afoul of the first amendment in that it abridges the freedom of the press. there is nothing sinister about the intent of this regulation. if it applied equally to bloggers and the mainstream press i really do not think the chilling effects would be substantively observable. the real problem as i see it is that once again, bloggers are somehow deemed not to be considered the press. somehow it is not recognized that thomas payne and benjamin franklin were in essence bloggers. franklin was a printer by trade and he published anything he felt like writing about. today the cost of entry is lower and one no longer needs a printing press and the skills to use it, a computer (perhaps owned by the public library, something else tied closely to franklin) and an internet connection is all that is required.

    while i'm on the subject, i'd like to mention that internet anonymity is something that is perpetually under attack and subject to a double standard with regard to the print media. i mention it here because the federalist papers were written by james madison, john jay and alexander hamilton and were published anonymously under pseudonyms like 'publius'.

    if these misguided modern sensibilities were applied during the founding of our republic, we would live in an entirely different and in my opinion diminished country.

  • jamesgattuso

    Good catch — I should have said “video system” and not “video.” The larger value does make a difference. I am still troubled by a conclusion that the blogger here is a paid endorser, and subject to fines. The guidelines of course do have much flexibilitiy, this is only an illustration, but that doesn't provide much comfort for bloggers not wanting to risk an unfavorable ruling. Of course, as you say, many bloggers can and do put in disclaimers on their own, but that is far different than requiring them by law.

  • MaryanneCarter

    Don't you think that if a blogger puts in a disclaimer that some of the posts may or may not be paid/sponsored that would be enough to keep the blogger out of trouble?

  • gmcgath

    The FTC standards explicitly apply a standard to blogs which isn't applied to “traditional media”:

    The Commission acknowledges that bloggers may be subject to different
    disclosure requirements than reviewers in traditional media. In
    general, under usual circumstances, the Commission does not consider
    reviews published in traditional media (i.e., where a newspaper,
    magazine, or television or radio station with independent editorial
    responsibility assigns an employee to review various products or
    services as part of his or her official duties, and then
    publishes those reviews) to be sponsored advertising messages.
    Accordingly, such reviews are not “endorsements” within the meaning of
    the Guides.

    The guidelines are extremely vague about who is subject to disclosure requirements. This is a chilling effect directed specifically at online communications.

  • MaryanneCarter

    Don't you think that if a blogger puts in a disclaimer that some of the posts may or may not be paid/sponsored that would be enough to keep the blogger out of trouble?

  • Pingback: What I Don’t Get about the FTC’s New Blogger Guidelines — Technology Liberation Front

  • gmcgath

    The FTC standards explicitly apply a standard to blogs which isn't applied to “traditional media”:

    The Commission acknowledges that bloggers may be subject to different
    disclosure requirements than reviewers in traditional media. In
    general, under usual circumstances, the Commission does not consider
    reviews published in traditional media (i.e., where a newspaper,
    magazine, or television or radio station with independent editorial
    responsibility assigns an employee to review various products or
    services as part of his or her official duties, and then
    publishes those reviews) to be sponsored advertising messages.
    Accordingly, such reviews are not “endorsements” within the meaning of
    the Guides.

    The guidelines are extremely vague about who is subject to disclosure requirements. This is a chilling effect directed specifically at online communications.

  • Pingback: IAB’s Brilliant Open Letter to the FTC on Blogger Rules — Technology Liberation Front

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