FTC Regulation Causes Blogger Panic

The US Federal Trade Commission has finally issued the results of its investigation into advertising through blogging, and perhaps predictably a certain amount of panic has been caused in the blogosphere. People are starting to worry that they may be fined $11,000 if they fail to disclose that a book they reviewed was provided free by the publisher.

The problem with such legislation is that it has enormously broad scope. What the FTC is mainly after is the professional advertising blogger, and the celebrity endorser. There are plenty of companies out there who will pay people for writing blog “reviews” of products. Mostly these products are much more expensive than books. Equally celebrities are showered with free stuff from companies who hope they will like it and say so in public. A private individual writing about a book she got for free is very small fry in comparison.

Furthermore, the FTC is well aware that trying to control blogging is a pointless exercise. Richard Cleland, an FTC staff attorney quoted by Reuters, said:

Principally the requirements are about disclosure. Our concern is less with the individual bloggers (than) with the advertisers who are using the bloggers. [..] On the Internet, everything is whack-a-mole, and that’s why our focus is not going to be on these individual bloggers.

So technically, yes, book reviews are included in these regulations. Practically the FTC is unlikely to come after you. And even if they did, simply stating that you got the book for free is sufficient to cover you.

So why the panic? Well, a lot of web sites run by established media companies, especially those who publish a lot of product reviews, are busy pushing articles about how bloggers could face massive fines. Anyone would think that they wanted to discourage bloggers from writing reviews. I wonder why that might be?

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9 Responses to FTC Regulation Causes Blogger Panic

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  2. You may want to read my interview with Richard Cleland. There is clearly a double standard in place and an effort to penalize alternative media with definitions of “compensation.”

    http://www.edrants.com/interview-with-the-ftcs-richard-cleland/

  3. Cheryl says:

    Ed:

    I see that Cleland told you the same thing that he told Reuters. The FTC does not intend to go after individual bloggers. And if he comes back with a sensible answer about blanket disclosures that makes things even easier. Sure there is a double standard with newspapers, but I think that everyone expects a newspaper to get free review copies whereas individual bloggers might be seen as people who had purchased the product.

    Really, this is not aimed at the likes of us. Sure there are potential wrinkles, but nothing more than I’d expect from such wide-ranging regulation. If you want to ask penetrating questions I think you should be asking big media companies why they are trying to frighten bloggers out of business with scare stories about massive fines.

  4. Gary Farber says:

    Hmm, you time-stamp your comments, but not your posts.

    Anyway, I wrote this some five-plus hours ago.

    “Practically the FTC is unlikely to come after you.”

    There’s no actual penalty. And the point is to go after advertising agencies and corporations that astroturf; this isn’t about what bloggers do, no matter how badly Richard Cleland fuzzed it up.

  5. The FTC is beginning its efforts by going after advertisers, after which it will issue cease-and-desist orders against bloggers. Should bloggers fail to comply with the CDOs, they will then face the massive penalties. I happen to believe these are well-intended guidelines. The problem here is that the terms of the “compensation” and, as you point out, the disclosure, are ambiguously defined and overbroad. As such, the CDOs will be carried out on ambiguously defined terminology. The additional problem is that Cleland doesn’t understand the present media climate and hasn’t adopted equitable guidelines that ensure practical enforcement and terminology. It is also unreasonable to ask bloggers who choose not to disclose to send back a book to a publisher.

    I’m all for ratting out payola. (I’m on record several places against junkets and other forms of journalistic whoredom.) But if we believe in a free press, then that means not maintaining an inequitable double standard. Product reviews are an altogether different terrain than sponsored posts or putting up bloggers in hotels and sending them checks to ensure favorable coverage.

  6. Larry says:

    Interesting language there. Since I review books and not go about endorsing products, I really don’t think there’s anything to worry about this, especially since I receive exactly the press kits that the NYT and other review outlets would receive. Curious reactions in some quarters, though.

  7. John Markley says:

    A few things:

    1. Your source for the assertion that the FTC is not going to be coming after individual bloggers is an FTC employee. It might be the truth, but given his position I don’t give Cleland’s testimony any more weight than any other government or corporate PR flunky who promises the public that the people who pay his salary are great guys.

    2. Even assuming that the FTC is sincere in its intentions, that’s no guarantee that it will actually play out the way those currently in charge intend. Regulatory bodies routinely become the tools of wealthy, politically connected interests within the industry they regulate.

    3. The fact that your average internet book blogger is so small is not protection; quite the opposite. If you’re one of the officials with the task of enforcing this, and you want to advance (or just not lose your job), you’re going to need to collect some scalps. In pursuit of that, you can go after big gerplayers who actually cause the corruption this regulation is supposedly aimed at- who might have the monetary and legal resources to put up a struggle, and a strong incentive to do so (if blog payola is making them big money.) Or you can go after some nobody who lacks those things. Being a weak, easy target is not a source of security.

    4. The exemption described in Edward Champion’s post and interview is a red flag. The rule imposes requirements on independent individual voices, but not on large, established media organizations of the sort that tend to be owned by multibillion dollar conglomerates. This is a pretty standard pattern for regulation intended to protect wealthy established interests from competition. This thing is custom-made to go after the small fry.

  8. Cheryl says:

    John:

    I appreciate the need to be wary of government regulators, but I’d ask you to consider the following.

    1. The FTC is not the TSA. It it not under pressure to catch presumed villains in the same way. If it goes after people it will have to do so in a cost-effective way. It also has a lot of pretty obvious and easy targets to go after before it starts on book reviewers.

    2. Compliance is easy. All a blogger has to do is note when she receives items for review for free and she should be OK. A lot of us do that anyway.

    3. The people who have most to gain out of this are the big media conglomerates, because blog-based reviewing is cutting into their market. But the new regulations don’t stop bloggers from reviewing. The only way that we’ll be stopped is if we take all of these scare stories seriously and censor ourselves.

    Where I think the FTC genuinely doesn’t understand is that it assumes that anyone sending a book out for review is doing so in the expectation of a positive result. That’s certainly not universally the case, and there is plenty of evidence out there to show that it doesn’t happen. On the other hand, one of the reasons I don’t run a book review magazine any more is that it became very obvious to me that some people at publishers did expect a positive result and were prepared to try to strongarm reviewers in order to get it. If this FTC ruling discourages people from doing that then it will be a very good thing.

  9. Gary Farber says:

    “The FTC is beginning its efforts by going after advertisers, after which it will issue cease-and-desist orders against bloggers. Should bloggers fail to comply with the CDOs, they will then face the massive penalties.”

    And your evidence for these assertion is…?

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