Posted by Tom Gable

As reported by the Associated Press, The New York Times and others, the Federal Trade Commission on Oct. 5 voted 4-0 to approve final guidelines for regulating anyone who reviews a product, including bloggers. As the AP reported:

The FTC will require that writers on the Web clearly disclose any freebies or payments they get from companies for reviewing their products. The commission also said advertisers featuring testimonials that claim dramatic results cannot hide behind disclaimers that the results aren’t typical…For bloggers, the FTC stopped short of specifying how they must disclose conflicts of interest. Rich Cleland, assistant director of the FTC’s advertising practices division, said the disclosure must be “clear and conspicuous,” no matter what form it will take.

Bloggers have long praised or panned products and services online. But what some consumers might not know is that many companies pay reviewers for their write-ups or give them free products such as toys or computers or trips to Disneyland. In contrast, at traditional journalism outlets, products borrowed for reviews generally have to be returned…The FTC’s proposal made many bloggers anxious. They said the scrutiny would make them nervous about posting even innocent comments.

Consumer advocacy groups were quoted as saying lack of disclosure is a big problem in blogs. They suggested putting more pressure on bloggers to “behave properly,” according to AP.

As reported in The New York Times:

The new rules also take aim at celebrities, who will now need to disclose any ties to companies, should they promote products on a talk show or on Twitter. A second major change, which was not aimed specifically at bloggers or social media, was to eliminate the ability of advertisers to gush about results that differ from what is typical — for instance, from a weight loss supplement…For bloggers who review products, this means that the days of an unimpeded flow of giveaways may be over. More broadly, the move suggests that the government is intent on bringing to bear on the Internet the same sorts of regulations that have governed other forms of media, like television or print.

The buzz on the blogosphere ranged from taking umbrage and pleading First Amendment privileges to those who felt bloggers needed to be held accountable and readers deserved to have all the facts, including those of sponsorship and freebies.

Then there are the concerns about business bloggers and experts who comment on companies, industries and trends rather than products. What type of disclosure is required if they have been paid by the company they are commenting on, or a direct competitor or consulting firm with ties to the company, its competitors or the industry? One “mommy blogger” from the United Kingdom questioned how it would impact those who receive free books to review.

I review books because I love them, and getting some for free is a bonus – now the US is cracking down on us mommy bloggers…They call it blogola – payola for bloggers – the term for free stuff that bloggers get to review on their site and even the cash that some accept for those reviews. Those “offers” can also take place on micro-blogging sites such as Twitter, as exemplified by the recent controversy surrounding the #nestlefamily event – in which bloggers have agreed to take part in a promotional event organised by the multinational company.

PRSA looked at the FTC notice and offered some possible applications of the guidelines:

• Bloggers who receive cash or in-kind payment (including free products or services for review) are deemed endorsers and so must disclose material connections they share with the seller of the product or service.
• Any firm that engages bloggers by paying them outright to create or influence editorial content or by supplying goods or services to them at no cost may be liable if the blogger does not disclose the relationship.
• Advertisements or promotions that feature a consumer who conveys his or her experience with a product or service as “typical” should clearly disclose what results consumers can generally expect or specify how the results were unique to the individual circumstances.
• If research is cited in an advertisement or promotion, any sponsorship of the research by the client or the marketer should be clearly disclosed.
• Celebrities who make endorsements outside the context of traditional ads, such as on talk shows or in social media, should disclose any relationship with the advertiser or marketer.

One thing absent from the debate so far: enforcement.

Is the pronouncement actually part of a clever strategy to grow the FTC bureaucracy? After all, government is one of our few growth industries.

Will the FTC create a new Blogestapo modeled after the Transportation Security Administration (TSA)? Staffers in blue uniforms will sit hunched over computers in new facilities throughout the land reading a zillion tweets, clicking through to a million blogs and news Web sites and looking for evil-doers. Next, a press conference featuring the media-savvy President Obama talking about the importance of saving our country from the new Axis of Evil: Twitter, Facebook and Blogging.