FTC, Blogging and Paid Reviews

The Federal Trade Commission has revised the “Guides Concerning the Use of Endorsements and Testimonials in Advertising” and will now require bloggers to disclose any freebies or compensation they receive from companies for reviewing their products.

FTC Publishes Final Guides Governing Endorsements, Testimonials
“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 Counting Cashconsumers 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.”

Penalties include up to $11,000.00 in fines per violation, with the new rules set to take effect beginning December 1, 2009.

This will be interesting to watch as the FTC has stopped short of specifying how bloggers must disclose conflicts of interest.