On October 5, 2009, the FTC (Federal Trade Commission) laid out a new set of rules for bloggers who write product reviews. The new rules are intended to give the government teeth to go after bloggers who receive cash or free products from manufacturers in return for writing favorable endorsements and testimonials of their products.
The circumstances that triggered this ruling have not been made clear, but apparently the government thinks that it is a large enough problem to warrant adding some new rules and the teeth to enforce them.
The new ruling requires bloggers to disclose any financial relationship between the endorser and an advertiser or manufacturer of a product. The enforcement teeth allows the government to impose an $11,000 fine upon bloggers for each offense. Both the manufacturers and bloggers could be fined under this change.
While this is probably a good thing to help avoid false and misleading advertising, it is not quite clear where the line will be drawn due to the vagueness of the wording. Theoretically, someone who received a free product from a manufacturer and then starts touting its benefits on a blog or forum without disclosing the fact that the product was free could be held liable under these guidelines. Under the FTC rules, that constitutes an endorsement.
Personally, I would still call it an opinion, but the FTC defines it as an endorsement and the author is potentially liable under these rules.
What about affiliate marketing sites that represent manufacturers’ and merchants’ products and then earn a commission when someone buys the product? There are hundreds of thousands of affiliate marketing sites where products are praised. Most of the time, the content for these sites comes from a manufacturer or merchant and the affiliate marketer may not have much control over the content itself.
I suspect that the FTC will only use this ruling to go after the most egregious offenders that are clearly misrepresenting a product that may harm consumers in some way. However, if your web site provides product reviews of any nature, it would be wise to post a statement in the site that discloses any “material connections” between the advertisers and reviewers, even if no such connection actually exists. The key to avoiding any problems is one of full disclosure of any relationships or compensation, as well as just providing factual experiences with a product.