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FTC Rules to fine Bloggers up to $11,000

The Federal Trade Commission (FTC) has updated their rules to include a stiff penalty to bloggers (and even Twitterers/Tweeple) who do not disclose their interests with commercial products and/or services.

That means any recommendations by bloggers on products/services they feature on their blogs will be scrutinized if they do not disclose compensation. The “compensation” may be in cash or in kind. The “in kind” is not specified but may include free products, free meals, trips and hotel accommodations.

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.


 




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.

This new rule will be in effect by December 1, 2009. Though this does not involve bloggers in the Philippines, it’s not improbable that the DTI might also do the same around here anytime soon.

More about the press release here.



Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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19 Responses

  1. bertsan531 says:

    how will this affect you mr. yuga? does this mean you will have to disclose everything you receive from companies/sponsors such as freebies for every product you mention,reviewed..also does it mean blogging is a form of advertisement which someday will be need to be taxed ..hehehehe..

  2. Ark says:

    lol I love Jollibee

  3. BrianB says:

    DTI? Why don’t they begin at the broadsheets.

  4. a.cantos says:

    sounds like many of us won’t like this. hehe.

  5. Jhay says:

    How is this different from guidelines that cover main stream media like newspapers and magazines?

    Why single out bloggers/Twitterers?

  6. wikus says:

    Yung mga small fish muna, tapos saka nila titirahin yung mga big fish ahaha

  7. iamupset says:

    Unfortunately, unlike other media, bloggers/Twitter(s) are not bound by the same legality and regulations, hence the FTC ruling.

    My main problem with this ruling is, it sounds a little vague and open to a lot of (mis)interpretation. Also, it seems to lack any teeth. Are there any implementation guidelines on this? How do they propose to monitor this or is it also case-to-case? This could end up as potential harrassment cases against them if they’re not clear about this.

    Kung gagayahin to ng DTI, sana pag-aralan muna nila ng mabuti, di uubra yong basta gaya-gaya lang, like most of what they do.

  8. soon DTI might as well generate this kinds of laws here in philippines…

  9. Darren says:

    same thing happen here in Taiwan~

  10. Calvin says:

    i think sinasabi naman ni abe kung yung mga products na nirereview nya ay pinahiram or binigay sa kanya or binili nya.

    hindi pa ba enough yung mga disclosure policy that other paid review services ask you to put in your site before joining them?

  11. yuga says:

    @bertsan – not yet since it does not cover us here in the Philippines. Nevertheless, I think I’ve been consistent with my disclosures here. I just don’t know if the FTC ruling wants itemized disclosure. Something like “I attended the press event and got a ballpen, notebook, and a 1GB USB flash drive.”

    @Brianb & Jhay – they already have the AdBoard for that. Bloggers are not covered by the AdBoard here in the Philippines, just the mainstream media.

    @iamupset – it’s possible they’d do it the BIR way — make high profile individuals as an example (like the BIR vs. Juday).

  12. Corporal Killjoy says:

    This is a good reason to start-up a renegade underground blog. Regulating the internet like this makes me want to do the “forbidden” things even more. Oh and btw, Bayani Fernando is an a-hole

  13. yuga says:

    In hindsight, this could kill the revenue models of a lot of top bloggers that are doing affiliate marketing.

    Imagine Darren Rowse, John Chow or Yaro Starak required to post a disclosure at the bottom of every affiliate promotions they make (for Membership Sites, Coaching Programs and other paid online programs).

    It’s like saying “I highly recommended this $999 problogging course. Sign up now! Btw, I make $499 from each one of you who signs up.”

  14. JonatsGonats says:

    I am sure, those people will find ways. They didn’t make so much money to be hindered by such rule. Affiliate marketing will just have to evolve, adapt, and take advantage of it.

  15. ken says:

    saw this on aots kahapon. this rule is really vague.anything that tries to regulate the internet would really just end up…meh…i doubt if ntc or dit would follow…dito magreklamo ka ng internet fraud mabuti pang di kna nagreklamo kasi wala kang mapaala. hope this would stop those “you have a hottie next door locked and loaded to…you” pop ups. lol

  16. Walter says:

    Let us find the hidden opportunity on this new development and take advantage of it rather than lamenting. :-)

  17. Ghanima says:

    It’s the taxes that are scary. I ever. Shouldn’t the government be happy that dollars are coming in into the country? Sus na lang… kung i-tax pa nila iyong 0.35 cents na nakuha ko sa adsense ewan ko na lang.

  18. Erica says:

    Why do they have to take part on everything? It’s not just. Bloggers should have the discretion whether to or not disclose items that are given to them by advertising companies.

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