New FTC rules about bloggers disclosing financial connections

[AlaskaDenise]

FTC to bloggers: Disclose the source of that cash

In June, we wrote that the Federal Trade Commission was considering new disclosure rules for bloggers. At issue: Unreported behind-the-scenes deals between writers and corporations, which can have a sizable impact on the substance and tack of any given blog.

Today, the FTC issued a set of revised advertising rules, which require publishers to publicly reveal any ?material connections.? In a statement, the FTC said that ?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? would not be in violation of FTC guidelines.

But the commission did issue a series of scenarios where a blogger or website would be subject to penalties, including this one:

A young man signs up to be part of a ?street team? program in which points are awarded each time a team member talks to his or her friends about a particular advertiser?s products. Team members can then exchange their points for prizes, such as concert tickets or electronics. These incentives would materially affect the weight or credibility of the team member?s endorsements. They should be clearly and conspicuously disclosed, and the advertiser should take steps to ensure that these disclosures are being provided.

?The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement,? the FTC said. ?Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.?

http://features.csmonitor.com/innov...to-bloggers-disclose-the-source-of-that-cash/

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

FTC Publishes Final Guides Governing Endorsements, Testimonials

Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC?s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides ? which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as ?results not typical? ? the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that ?material connections? (sometimes payments or free products) between advertisers and endorsers ? connections that consumers would not expect ? must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ?word-of-mouth? marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement ? like any other advertisement ? is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement ? or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC?s Web site as a link to this press release. Copies also are available from the FTC?s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC?s online Complaint Assistant or call 1-877-FTC-HELP 1-877-FTC-HELP ( 1-877-382-4357 1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC?s Web site provides free information on a variety of consumer topics.

http://ftc.gov/opa/2009/10/endortest.shtm

 

[sharon sanders]

Re: New FTC rules about bloggers disclosing financial connections

Thank you AlaskaDenise.

FluTrackers has enforced a no advertisement policy since our beginning in February 2006. We have never allowed participants "to push" links to products that they have a material interest in. In fact, we have terminated the participation of hundreds of entities over the years who wanted to use FluTrackers for their enrichment.

We have never accepted any corporate or government money, or gifts in kind.

We do not sell anything (no t-shirts, maps, mugs, disease reporting devices, etc.).

Our work here is free to the world and is the donation of many individuals from around the world who are interested in helping their fellow man.


Thank you everyone for participating!

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

Actual text of entire regulation:

http://ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf

(snipped)

...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.

.

 

[Vibrant62]

Re: New FTC rules about bloggers disclosing financial connections

About time - this should help to put paid to a lot of spamming IF it is enforced

 

[Emily]

Re: New FTC rules about bloggers disclosing financial connections

I'm about halfway through this long document, but it does not seem to address spamming at all. We have anti-spamming laws that attempt to deal with that.

These regulations address bloggers, (whose sites I don't have to read), and the shills, fanboys and fangirls that post to forums and product review sites. Those are annoying, but web sites are private enterprises so we can choose not to use sites that don't try to control that kind of activity.

Also I see favoring of traditional (big money) media here on page 46:

"One commenter asked whether, if the blogger in Example 7 should disclose that he received the video game system for free, must every critic disclose that a reviewed item was provided for free?97 According to the commenter, reviewers in traditional media do not have to disclose this information, and reviewers in nontraditional media platforms such as blogs, online discussion boards, and street teams should not be treated any differently.98 This commenter also noted that given marketers’ lack of control over “what employees say on online discussion boards, or what street team members say to their friends,” it would be impracticable for them to ensure that material connections are disclosed in endorsements made using these media, and unclear what steps marketers would have to take to prevent endorsers from failing to disclose material connections with the marketer.99
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.100 Under these circumstances, the Commission believes, knowing whether the media entity that published the review paid for the item in question would not affect the weight consumers give to the reviewer’s statements.101 Of course, this view could be different if the reviewer were receiving a benefit directly from the manufacturer (or its agent)."

The Commission is absolutely wrong about that, IMO, and should not have caved into powerful, moneyed MSM interests on that. It is just as deceptive to me when a MSM manager, (or the entity itself), gets financial gain from a product or service and does not disclose that gain, as when the MSM employee assigned to review a product hides financial gain. The news manager decides what to review and what to publish. They have tremendous power and perceived credibility, much more so than 1 blogger in a sea of millions. Laws should at a minimum be fairly applied.

I checked the ACLU web site to see if they were raising an alarm about any additional concerns about these regulations affecting free speech of amateur journalists, but don't see those types of concerns there.

I did see another issue that does affect all journalistic freedom, though.

http://www.aclu.org/freespeech/gen/41219prs20091001.html

That is very disappointing to me.

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

I'm about halfway through this long document, but it does not seem to address spamming at all. We have anti-spamming laws that attempt to deal with that............

There is "comment spamming" whereby posters/bloggers include, as part of their comments, links to sites where they have financial interests or arrangements.

Comment spam: Comments made with the sole purpose of gaining a backlink, which in turn will send traffic or link juice (provided the blog in question doesn?t use the nofollow tag) to the site of the spammer. Some spam comments are very explicit and come with several links to drug or gambling related sites. Other forms are more subtle, where the commenter actually tries to leave a relevant message on the blog.

http://aris-haryana.blogspot.com/2008/11/bloggers-glossary-part-2.html

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[Emily]

Re: New FTC rules about bloggers disclosing financial connections

There is a legal definition in state and federal law, but anyone can call anything they like 'spam', and then get sued for it by someone with the money to do so.

http://www.forbes.com/2007/02/21/spam-lawsuit-marketing-tech-cx_ag_0222spam.html

But unless someone likes to be embroiled in conflict, there are software solutions to block link posters. And the new FTC regulations don't seem to deal with that unless there is an endorsement. They seem to be focused on bloggers, no links or direct selling necessary. How will they enforce this without getting snoopy when people praise products or services on private blogs or forums? These people have no more credibility than someone you chat with in line at the market.

When the government has no power to regulate those that can really harm us, then it just clogs commerce and free speech. To me it is class warfare when a manager at a big paper or television or radio station can accept free products or services from a business, then have an employee 'review' or report on the company or the product. But woe to the hobbyist that runs a book club website and links to Amazon for a few pennies for a book she touts without disclosure! These regulation are worse than no regulations if they are not across the board on all the media and those who work for them.

I see nothing in these new regulations that will force government agencies to disclose these licensing contracts to the public on government web sites, either.

http://www.cdc.gov/od/science/techTran/

Search for: 'market share', 'profitability', 'freedom', in this.

http://www.cdc.gov/od/science/techTran/May_2009_Brochure.pdf

Now that would be an important disclosure, IMO. Same with patents held by regulatory agencies or their employees on technology they regulate and recommend. If there is nothing to hide, why not disclose?

Anyway, even when laws to regulate MSM are put into place, they get around it like with the canned news laws.

http://www.dallasobserver.com/2006-05-04/news/canned-news/1

 

[gsgs]

Re: New FTC rules about bloggers disclosing financial connections

internet is international

suppose they think I violated some US-law by praising some
US-product on my webpage located in France while
I'm German.

Now they "require" that I disclose some connections -
how can they enforce it , when I never travel to USA ?

How am I supposed to even know about these US-laws ?

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

There is a legal definition in state and federal law, but anyone can call anything they like 'spam', and then get sued for it by someone with the money to do so.

Try google's definition at: http://www.google.com/support/webmasters/bin/answer.py?hl=en&answer=81749

I think the problem comes in where a blog or forum commentor is taking advantage of the success of one site to promote their own site without any disclosure or financial arrangement. It's free advertising and unfair to the site that worked hard to build a successful blog, etc. The honorable thing to do is for the undisclosing commentor to contact the owners and arrange for a paid advertisement.

An example: My state's largest newspaper includes a comment feature following many news articles. If a commentor frequently posted comments to various stories that included an embedded backlink to a site that was profitable to the commentor, that would be comment spam and certainly unethical. The newspaper has advertising for sale, which would be the appropriate vehicle to carry the message of the commentor's commercial venture.

This is why many blogs don't allow hyperlinks in comments, or if they allow them, they employ various internal options to effect the outcome they feel is appropriate for their site. Many sites understandably ban comment spammers.

gs - simple "praising" isn't the problem, but rather someone who stands to gain financially.

On this site, I've sometimes had doubts about new posters who immediately include an embedded link to a commercial site in their comments. I have my own ways of identifying whether they are a comment spammer. If they are, I report them and they get banned.

.

 

[gsgs]

Re: New FTC rules about bloggers disclosing financial connections

I don't like FT's policy of banning and removing posts.

mark it as "presumed spam" , even hide it,
but provide an option, so we can read it nevertheless

e.g. move it to the spam-room

 

[sharon sanders]

Re: New FTC rules about bloggers disclosing financial connections

We are not going to have a spam room. lol

 

[Emily]

Re: New FTC rules about bloggers disclosing financial connections

How spam is handled is discretionary, but if a big newspaper isn't using the suggestions in the Google link to filter spam, there's likely a symbiotic relationship between the comment spammer and paper's web site. I think that is why newspaper article comment sections are unmoderated, too. I can't bear to read most of them with all the insults going on in some.

The reason all that is allowed, I think, is to increase site 'hits' in the traffic analysis logs. They probably make more on their ads that way. Also, I've looked at auction sites where people sell their web sites and they are priced according to traffic, no. of posts, and members. So any posts can make the web site more valuable. Big newspapers aren't victims of spammers. But now the FTC will have to spend our tax dollars investigating fairly petty complaints most likely generated by competing businesses.

Some could be less than petty, but if the offender is a big company, the case is usually a dog and pony show. I was talking to a federal prosecutor last Summer about a major case against a corporation to get ready to write sentencing letters. This was a case involving major harm, physical, emotional and financial. Even other large companies were damaged.

Lots of people were upset with the prosecutor's sentencing recommendations, but I told him I was shocked and thrilled he was able to prosecute to a plea at all. He said that he was surprised and happy, also. He said a lot of the time they can't do anything at all against large or well-connected entities.

That's the way it is, so enforcing current regulations and laws fairly would make me happier than new ones.

 

[gsgs]

Re: New FTC rules about bloggers disclosing financial connections

so, is anonymous blogging now forbidden in USA ?
How else would they want to enforce that policy.
Also anonymous forums, anonymous webpages...


But then again, it's different in other countries.
Just pay someone in -say- India to upload your
encrypted emails to a forum/blog/webpage located in the
caribic or such.

or create a new internet2, uncontrolled, anonymous
would they forbid it ?

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

Perhaps another example is needed.

Have you ever seen signs posted at entrances to business (A) buildings, stating "no soliciting? In many cases, it's matter of telling the solicitor (B) that they are not welcome to come into another successful business (A) and take advantage of their capital outlays, advertising, etc. and spread the word about another business (B) utilizing the assets of another business (A), especially to unsuspecting customers. At the very least the solicitor (B) should identify the fact that he is soliciting for his business (B) and if he's decent (or required) he will pay the business (A) a fee for the privledge of utilizing the facilities of the first business (A).

The same principle applies to online businesses.

hopefully, the new FTC rules will clarify that this is not acceptable and most people will stop the activity without any complaints being filed.

.

 

[AlaskaDenise]

Re: New FTC rules about bloggers disclosing financial connections

so, is anonymous blogging now forbidden in USA ?
How else would they want to enforce that policy.
Also anonymous forums, anonymous webpages...


But then again, it's different in other countries.
Just pay someone in -say- India to upload your
encrypted emails to a forum/blog/webpage located in the
caribic or such.

or create a new internet2, uncontrolled, anonymous
would they forbid it ?

I think you're missing the point. It's an issue of unfair business practice.

.