Bloggers Face $11k FTC Fines For Not Disclosing Paid Endorsements
This blog post was not sponsored by anyone. If it were, I would have to disclose such a relationship or face up to $11,000 in fines from the Federal Trade Commission, according to newly published guidelines.
An update to FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising includes the following language (emphasis added):
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.
The above language is a done deal–it’s already passed an FTC commission vote 4-0.
What does this mean for bloggers?
Well, aside from the obvious “pay for post” deals–which now need full disclosure–“in-kind” endorsements are also a no-no without disclosure. So the next time a celebrity or A-list blogger raves about the latest camera or computer, they’d better disclose any relationship they have–or dig deep into their pockets.
Interestingly, the language appears to close the loophole I see used the most. “Brand X didn’t actually pay for the post, so we didn’t need to disclose anything.” Well, actually, it appears you will have to from now on. If you post a glowing endorsement about the new Nikon camera, but fail to mention that you also “consult” with the company on its social media initiatives, that would count as a “material connection” and could result in a fine.
The only gray area appears to be where do you post the disclosure–does it have to be within the post, or is a “disclosures” page sufficient–and, do you have to disclose what you received in compensation?
So what about that endorsement on Twitter? Do you need to worry about that? It appears so:
The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
Of course, the above guidelines are not binding–the FTC would need to prove that your actions violated the FTC Act–but I’m not willing to be the blogger that gets to put them to the test.