WASHINGTON, DC — The U.S. Federal Trade Commission expects to release this summer new regulations defining some behaviors for bloggers who are compensated when they endorse or review products.A growing number of consumers have become dependent upon online reviews posted by peers who claim to have tested a product or service. According to the FTC, the trend has sparked a wave of bloggers whose occupation is providing endorsements in exchange for money, equipment, trips to exotic destinations and the like. Many do not disclose the underlying relationships with manufacturers and service providers when they post, giving readers a false sense their opinions are independent and unbiased.
The FTC stops short of calling the practice fraud, but it does frown upon such conflicts of interest and intends to pursue bloggers and the companies that support them when relationships are not made crystal clear or bloggers make false claims.
Of primary concern to the adult industry is a clause in the regulations that would give the FTC oversight of common affiliate practices. Simply posting an ad and receiving sales commissions from click-throughs would trigger FTC oversight under the new guidelines. Adult content-review sites would be particularly vulnerable.
“If you walk into a department store, you know the [sales] clerk is a clerk,” Rich Cleland, assistant director in the FTC’s division of advertising practices, told The Associated Press. “Online, if you think that somebody is providing you with independent advice and… they have an economic motive for what they’re saying, that’s information a consumer should know.”
Sam Bayard, a fellow at Harvard’s Berkman Center for Internet & Society, phrased the concern in a different way.
“I don’t think, for the average reader of a blog, it immediately comes to mind that they actually have a relationship with the company,” he told the AP. “You think about [blogs] as personal, informal, off-the-cuff and coming from the heart — unfiltered, uncensored and unplanned.”
The FTC has imposed similar regulations on real-world media for decades. The evidence can be seen in television commercials that bear the disclaimer “compensated celebrity spokesperson” and in magazine pieces that appear to be reportage but bear the word “advertisement” at the top or bottom of the page. The new regulations represent the FTC’s attempt to impose similar order among the chaos in cyberspace.
Unlike in traditional print and broadcast media, where journalists usually must return “review units” when they finish with them and are prohibited by professional ethics from accepting payment for reviews, on the Web “[r]ules are set by the individuals who create the blog,” Lee Rainie, director of the Pew Internet and American Life Project, told the AP. “Some people will accept payments and free gifts, and some people won’t. There’s no established norm yet.”
Bloggers are not in the least happy with the FTC’s plan. Many complain the regulations leave too much room for prosecution of innocent posts. Some have threatened to quit blogging altogether.
“[My blogging] helped us,” said Rebecca Empey, a New York mother of four who earns about $800 monthly from compensated blogging. She said she discloses her relationships with “visit my sponsor” links on her Web pages. “This made us feel great. [Under the new rules,] will I be sued because I didn’t hire a scientist to do research?”
Other bloggers agree that some sort of standards-and-practices guidelines are needed, but they question whether the FTC should be involved.
“It would always be better for bloggers to self-police,” Robert Cox, president of Media Bloggers Association in New Rochelle, NY, told the AP. “We have laws on the books. They apply to everybody, not just people who write blogs.”
Fashion bloggers began a self-regulation effort in January with the creation of the Style Coalition. The group has about 15 member sites currently and has begun crafting an ethics policy.
Cleland told the AP the FTC’s involvement is as crucial to protecting the public interest online as it is offline.
“It’s sort of a recognition that word-of-mouth marketing in whatever form, whether electronic or not, is a significant part of the marketing strategy of modern companies,” he said. “Because it’s new, I think it is imperative that we provide some kind of guidance.”
Under the current proposed regulations, which are subject to revision after public comment, bloggers of any kind — including those who post reviews at sites like Amazon.com and those who microblog through Twitter — would be required to reveal when they are compensated for their comments and would have to back up any claims they make. Those who fail to conform could face civil lawsuits brought by the U.S. Department of Justice and be required to pay restitution to consumers.
