Swag The Dog: FTC Rules Bloggers Should Disclose Freebies
Bloggers who review products given to them for free should disclose that fact in some circumstances, but journalists who write reviews for news outlets generally need not do so. That's according to the Federal Trade Commission, which on Monday issued its long-awaited revised guides to testimonials and endorsements.
"The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media," the FTC said in its written guides.
The guides are not in themselves enforceable, but serve to put marketers on notice about the type of activity the FTC will consider deceptive.
The new guides specify that bloggers should disclose "material connections" to marketers -- including the receipt of free review copies -- when consumers would be surprised to learn of those connections. The guides call for a case-by-case analysis of whether disclosure is required, and provide that factors to be considered include the product's value, whether the blogger routinely receives requests to post reviews, and the blogger's readership.
A blogger who "frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers' target market" is more likely to be required to disclose a free review copy, the FTC states.
For example, if a marketer gives a college student who blogs about video games a free copy of a new gaming system and asks the student to post a review, the blogger should disclose that he got the system for free, the FTC says. "Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product -- and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement," the agency says. Marketers are expected to inform bloggers when they must disclose that they received gifts, and to monitor sites for compliance.
The FTC is not recommending that news outlets -- newspapers, magazines, television and Internet news sites -- issue similar disclosures. The FTC justifies the distinction by saying that consumers are not likely to care whether people who review items for newspapers or magazines have received free review copies.
Experts in advertising law had mixed reactions to the guides. Jeff Greenbaum called the FTC's position "troubling," saying that it could create confusion among marketers. "This issue is going to take a long time to sort itself out," says Greenbaum, an advertising and marketing lawyer with Frankfurt Kurnit Klein & Selz. The new guides, he says, could result in marketers being judged differently "depending on whether they send free products to Cnet or to an individual consumer blogger."
But Georgetown law professor Rebecca Tushnet says the distinction between consumer-bloggers and professional reviewers makes sense because Web sites do not necessarily reflect the identity of the creators. "That is a sufficient difference to justify a paid disclosure requirement." She adds that news companies often self-regulate via ethics codes.
The guides also clarify that marketers do not need to be concerned about spontaneous conversations between consumers. "The fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker's statement can be considered 'sponsored' by the advertiser and therefore an 'advertising message'," the agency wrote. "A consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement."
John Feldman, an advertising lawyer at Reed Smith, says that these statements should reassure some marketers who had been worried that they might be held responsible for comments about their products.