You May Be Covered By FTC "Paid Endorser" Rule

http://www.pcworld.com/businesscenter/article/173175/yes_even_you_may_be_covered_by_ftc_paid_endorser_rule.html

Yes, Even You May Be Covered By FTC "Paid Endorser" Rule
Tech Inciter
The tech world according to David Coursey
David Coursey Tuesday, October 06, 2009

New rules on paid endorsements may give readers a false sense that blogs are telling them the truth. While many bloggers will doubtless follow the Federal Trade Commission's requirements, there are too many blogs and too few enforcers.

Here's the problem: Some bloggers have been writing enthusiastic endorsements of products they were paid to write about, without ever mentioning the payments to their readers.

What seemed like personal endorsements on advice sites for parents, investors, dieters, and others, really amounted to paid commercials.

The FTC ruled that consumers have a right to know if the "opinions" they read are really bought and sold,

Now, such payments have to be disclosed or the blogger faces punishment ranging from a warning letter to an $11,000-per-incident fine.

You don't have to be a "professional" blogger to be covered by the new rules. If you get something for free and say something nice about it, the FTC wants you to mention the freebie to your readers. And that includes Facebook pages and other social media sites.

It will be interesting to see how such a disclosure can be worked into a 140-character Twitter post.

"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 in a news release.

"Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service."

The bigger hope is that companies who provide endorsement money to bloggers will require their recipients to obey the new rules and disclose. But, of course, blogs written and hosted outside the U.S. are beyond the FTC's reach.

Not sure what is and isn't legal under the new rules? Our Ian Paul wrote a piece that includes some examples and common-sense advice. And, yes, your social media pages are covered by the new rules.

In summary: Tell your readers the truth and let them make the decision about your credibility.

This is the first time in three decades that the FTC has looked at its rules covering paid endorsements, which will also impact celebrities, research firms, and others.

In the case of paid research, companies are now required to disclose their connection to reports they fund.

The new rules are effective December 1.

My take: This is a good rule that won't stop the unscrupulous but will help well-meaning (if crass) bloggers do the right thing by their readers. In my case, I will be more diligent about reporting when I am writing about software I've gotten as a free review copy, although I don't think the practice comes as a surprise to readers.

David Coursey tweets as @techinciter and can be contacted via his Web page.