FTC To Start Fines To Bloggers

**FTC To Start Fines To Bloggers **

The Federal Trade Commission has expanded truth-in-advertising rules to target bloggers who favorably review products without disclosing ties to associated businesses or advertisers.

The FTC approved this week a rule by a 4-0 vote to require bloggers to do so or risk paying a stiff penalty, up to $16,000. The rule will go into effect Dec. 1.

FTC spokesman Betsy Lordan explained in an e-mail: “If it is determined after a full investigation that a violation of the FTC Act’s prohibition against deceptive and unfair practices has occurred - and that it is in the public interest to pursue enforcement - the end result is a final Commission order. Monetary penalties are only imposed to deter further violations if that order is violated.”

A news release posted on their Web site Monday explained why bloggers should be subjected to these rules. It said: “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.”

An example of someone who could be fined for not following disclosure guidelines was given in a 81-page guide written by the FTC about the new rule, which also covers celebrity endorsements and other advertisers. The example said:

"A college student who has earned a reputation as a video game expert maintains a personal weblog or ‘blog’ where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review.

“Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.”

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Interesting. Reasonable.

This may be unenforcable though if the site is located abroad.

Yep that’s what I was thinking.

From today’s Washington Times Pg A22

America**'s Internet police**
The FTC gets ready to investigate bloggers

You may have won $10 million dollars!!! Or not, but the same federal agency that can’t stop those dishonest sweepstakes mailings wants the right to supervise everything bloggers, Facebookers, tweeters and practically anyone else writes on the Internet starting in December. You see, bad, bad regular people may write something nice about puppy kibble after nefarious corporate goons pay them off with a free bag of dog food. Consumers must be protected from such trickery.

The plans of the Federal Trade Commission don’t bother us newspaper folks none because we’re exempt. Our book reviewers can keep right on taking free books, and our music reviewers can wallow in a torrent of freebie music downloads until their iPods explode. But if you readers do the same thing and fail to disclose the full details of your “financial relationship” with a “marketer” before you tweet, both you and the book publisher may have broken the law, resulting in fines of more than $10,000.

The rules are arcane, but their essence is simple. If a regular person says something online that an FTC official finds fishy, the agency can investigate. To do that, the rules say, feds will have to check out individuals’ finances, examine what they’ve received in the mail and review what they’ve posted on the Internet for evidence of corporate taint.
Obvious civil liberties concerns aside, the FTC leadership must be delusional. Even Google tracks only a small fraction of the torrent of new posts, comments, videos, podcasts and other online chatter added to the Internet every day. Now a bunch of Washington bureaucrats think they are going to become the police in a neighborhood so big no one can measure it. Perhaps the company that did the last complete inventory of sand on public beaches will be available to help.

Which brings up that irritating relic of 1791: the First Amendment. How is the FTC going to define the difference between unregulated journalists at real media companies and the bloggers who need federal supervision? Journalists get fired and start blogs. Bloggers get hired by media companies. Bloggers join together and start their own media companies. Bloggers appear on TV and write for the dead-tree editions of newspapers. Media companies buy blogs. Media companies launch blogs. Such a vast gray area is an opportunity for plenty of mischief.

Indeed, it is exactly on this gray area that the FTC says it will focus. The more commercial, popular, long-standing and successful a blogger or tweeter is, the more likely he will fall under the new rules. In other words, the more like the mainstream media an online person is, the more likely the FTC will want to regulate him. That makes perfect sense.

If the four FTC commissioners who voted for this fiasco had any sense, they would skip the inevitable lawsuits and go back to their real jobs.

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