The Federal Trade Commission has expanded truth-in-advertising rules to target bloggers who favorably review products without disclosing ties to associated businesses or advertisers.
The FTC approved a rule by a vote of 4-0 on Monday to require bloggers to do so or risk paying a stiff penalty, up to $16,000.
FTC spokesman Betsy Lordan explained in an email:”If it is determined after a full investigation that a violation of the FTC Act’s prohibition against deceptive and unfair practices has occurred — and that it is in the public interest to pursue enforcement — the end result is a final Commission order. Monetary penalties are only imposed to deter further violations if that order is violated.”
A news release posted on their Web site Monday explained why bloggers should be subjected to these rules. It said: “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.”
An example of someone who could be fined for not being truthful enough was given in a 81-page guide written by the FTC about the new rule, which also covers celebrity endorsements and other advertisers. The example said:
“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 consumer-generated 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.”