FTC Issues Rules Governing Paid Blog Endorsements

The Federal Trade Commission has issued new rules requiring bloggers to disclose financial or employment relationships regarding products they endorse on their blogs or in other online forums. The FTC's action, which began this past Spring, is a result of numerous cases of "blogola" (blog payola), whereby companies offer bloggers compensation, including free products, or instruct their own employees, to write rave reviews about the companies' products, without disclosing the relationships driving such inherently biased reviews.

Of greatest importance to bloggers, the FTC's new rules (which it calls "guides") contain a couple of online and blog-specific examples of when disclosure is required (violation of these rules would presumably subject the violator to the FTC's hefty penalties):

1. "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 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. "

2. "An online message board designated for discussions of new music
download technology is frequented by MP3 player enthusiasts. They exchange
information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board."

Any blogger with a modicum of integrity would already have thought of this. But if not, consider yourselves now "guided" by the FTC.