As a website owner, blogger or online entrepreneur, it’s essential to remain aware of the latest laws and regulations. Recently the Federal Trade Commission (FTC) updated its Guides Concerning the Use of Endorsements and Testimonials to apply files to bloggers. A new requirement states, “bloggers to make an endorsement mast disclose the material connections they share with the seller of the product or service.”
The fines for violation the new rule can be up to a lofty $11,000 per blog post. This gives bloggers thousands of reasons to disclose when they are paid to review services and products. According to the FTC announcement:
“ 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.”
Bloggers now need to disclose the type of relationship they have with advertisers or pay-per-post clients. The FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising was not revised since 1980. With the growth of online marketing, an update was deemed necessary to cover areas such as blogging and celebrity endorsements.
The revised Guides also require clear disclosure of what customers can expect. In the 1980s version, it was permitted to include a disclaimer stating results are not typical. Now realistic features and experiences are required.
Decisions about bloggers and other word-of-mouth marketers will be made on a case-by-case basis. Connections are expected to be disclosed. A blogger receiving cash or other payment tor review a product or service is considered an endorsement. If research conducted is sponsored by the company, this also must be disclosed to the consumer. The regulations are meant to deter false or misleading claims. Further, celebrity endorsers are also now required to disclose their relationship with advertisers when making endorsements.
The Guides are not binding laws but guides to help marketers comply with the Federal Trade Commission Act. The Commission is required to prove challenged conduct on behalf of a blogger violates the FTC Act. The FTC works for consumers to prevent unfair, fraudulent and deceptive business practices.
No longer is there a safe harbor for bloggers to hide when writing reviews and endorsements. From now on, bloggers have to exercise greater care when promoting various products and services. Gone are the carefree days of writing reviews, including links and earning profits. Now bloggers need to work harder to accurate portray the features of products and services as well as their relationship to the advertisers.
As you promote your online business through blogging, articles and reviews, make sure to remember disclosure. Lapsing into old habits could mean a significant fine of up to $11,000.