FTC is going to force bloggers to disclose payments

Big news yesterday for bloggers based in the US, especially those who are actually making a decent income. Starting December 1, 2009, the Federal Trade Commission (FTC) will require bloggers to disclose payments from companies for reviewing their products. This also includes any free products or services the bloggers may receive as compensation for their posts.

As you already guessed, conflict of interest is big problem with the internet. Although sometimes it’s obvious and there’s nothing hidden about the relationship the blogger has with the company they are writing about, at times, it’s hard to figure out who’s in bed with whom.

For example, I made a post yesterday about frugal themes, which I’m obviously an affiliate of. That’s perfectly fine. But what if I gave made it seem like I was impartial but I was getting paid a fee? What if Eric from frugal themes gave me $1000 to write about how awesome his theme is. Then I write up how amazing I think it is, irregardless of whether I’m using or have ever used his theme. Well, in that case, I have professional responsibility to clearly disclose the relationship.

How do we disclose?

Well, exactly how we disclose hasn’t been defined yet. If additional details aren’t released by December 1, 2009, to be on the safe side, I would simply add a paragraph at the end of each post that states what I’m getting for the effort of writing the review.

So what if we don’t disclose?

You don’t have to disclose but if you get caught, the penalty is pretty substantial for most of us. You can get fined up to $11,000 for each violation. That’s $11,000 more dollars than most bloggers are making.

Is this good for bloggers?

Until yesterday, the FTC guidelines for endorsements and testimonials had been unchanged for almost 30 years. It’s about time they started playing catchup with technology. This change might not seem like a big deal but for some power bloggers, this could have a huge impact on their bank accounts. Remember, this not only affects solo-bloggers, but it also includes staffed bloggers from well-known sources. For instance, if a blogger from cnet.com got a trip to the Super Bowl from Apple to review its latest iPhone, you’d want to know right? In a few months, you will.

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This entry was posted on 2009/10/06, 9:53 am and is filed under Developing content. You can follow any responses to this entry through RSS 2.0. You can leave a response, or trackback from your own site.

At 2009.10.06 10:45, Jessica said:

I’m a firm believer in how much you make is your business and no one elses, my Dad taught me to be that way. However; I do see the other side, if you got paid to write a good review for a product you’ve never used that would be misleading to potential customers. There are pros and cons on both sides.

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At 2009.10.06 11:11, Dave Doolin | Website In A Weekend said:

I have mixed feelings about the whole thing. On the one hand, disclosure should be good for customers. On the other hand, where is the line to be drawn? For example, I’ve read that some people totally discount linkedin recommendations where there is the appearance of reciprocity.

@jessica, we’re moving into a different reality I think. Again, on one hand it’s no one else’s business. On the other hand, if no one ever discusses finances and earnings… we become divided, and conquered. But talking about money is the ultimate social taboo. I’ve tried in the past, but no longer.

At 2009.10.06 11:29, Gabe Young said:

Disclosing payments is a tough topic. I agree with both of Jessica and Dave that for the consumer, it’s a much needed thing. Conversely, bloggers having to disclose it when they receive income or gifts may have a huge impact in the blogging community. Right now, the “disclosure” is still gray since the FTC hasn’t really defined what they mean by that term yet.

At 2009.10.06 19:17, Brad said:

I’m in Canada so I think I’m safe unless it covers U.S. products to.

I am not apposed to it though, so that people know if you received some support for the post or not.

At 2009.10.06 19:34, Props blog Ideas said:

This is kind of interesting. I’m not totally sure how i feel about it. It’s nice to know, but I think it really intrudes on the privacy of a blog. TV networks don’t announce how much they get for running an ad each time it runs… I think as long as it can be disclosed in a separate location, it’s not a big deal.

At 2009.10.06 19:57, Brad said:

@props I think you have to disclose that its a paid post on the post or on your homepage that says some posts are paid.

At 2009.10.06 20:42, Harsh Agrawal said:

I read about it on Nytimes and I guess it will be a hard to implement and this is something which is not possible to track down. Probably FTC is trying to get hold of online business and the way it is becoming main stream.

At 2009.10.07 01:02, shally said:

This is interesting.. but it seems like we could not keep our income secret anymore..

At 2010.01.25 13:52, Cosmetic Dentist in Denver said:

I dont see how they will be able to regulate all of the gift giving that goes around…

At 2010.01.25 22:45, Gabe Young said:

This should clear it up: Biggest myths of FTC disclosure.

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At 2010.01.25 13:53, Strategic Internet Marketing said:

I think that this sounds like a great idea! It will benefit the consumer for sure!