Bloggers and Online Publishers Beware: New Laws Coming Soon

Online publishers and bloggers are getting a set of new ground rules, courtesy of the Federal Trade Commission (FTC).

Starting on the 1st December 2009, bloggers who endorse products or services must disclose any compensation — meaning commissions, payments, samples or gifts — that they receive. Failure to comply could mean fines of up to $11,000.

This is the first time in almost three decades that the FTC has revised its rules covering paid endorsements, reviews and testimonials.

Twitter and social network users will also have to come clean. They will have to disclose any connections or compensation that could be influencing their opinions. For example, if an employee of Microsoft praises Windows 7 on Facebook they will have to divulge that they are employed by the software company.

Many of the established techniques used by advertisers to gather endorsements for their products or services will come under scrutiny.

Currently advertisers can use a one-off result to promote their products and service, provided they include a disclaimer such as "results not typical." For example, an investment website could show how one customer made a high return by using their trading techniques, even if all of their other customers lost money. The FTC will now look at claims and testimonials in the context of the offer to determine whether they are deceptive and can be proven, or "substantiated”. If they can’t, they will be deemed illegal.

The FTC also wants advertisers to disclose any payments that they make to outside entities that conduct studies and research whose results are then used within ads. You know the sort - “According to the National Union of Cat Lovers, nine out of ten cats prefer Oprah”.

It is also important to be clear in your message to ensure it doesn’t have two interpretations, which reminds me of the dubious complement “he has the perfect face for radio”.

Testimonials should no longer be taken out of context to give them a different meaning. For example, if the quote “Their customer support team are superb” was taken from the longer quote “Their customer support team are superb when compared to their dire product, but on reflection even the support was poor”, it would be deemed to be deliberately misleading. Film posters are famous for grabbing soundbites that are out of context.


My View

There are more grey areas in this legislation than a winter sky over London, so I suspect it will end up being unenforceable. Since blogging started, over 130 million blogs have been launched, of which around 16 million are updated. How will the FTC enforce these rules across such a huge sector?

Usually the FTC takes a few high profile cases to court to scare people into compliance, but the affiliate and advertising scammers who this applies to most are individuals working from home often in the Far East or Eastern Europe.


So Are They a Waste of Time?

Personally, I think this legislation is much needed and long overdue. Its impact will take time to make a difference in the World Wild West, but what I hope will happen is Internet users will start to seek out sites that obey these laws, because they will know their advertising and recommendations are honest and open.

Over time those who deliberately mislead will be squeezed out the market or change their ways.

Wishful thinking? Probably, but I’m an optimist at heart.