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US Requires Disclosure From Paid Bloggers And Celebs On Twitter

Posted by Peter Feld on October 5, 2009 04:57 PM

The practice of sponsored blogging, which we called out last week, is in for some new regulation from the US government. Ad Age reports that the Federal Trade Commission has voted to "require bloggers to clearly disclose any 'material connection' to an advertiser, including payments for an endorsement or free product," starting December 1, with fines up to $11,000. The new rules also govern celebrity endorsements.

Ad Age calls the new rules "the most far-reaching attempt to stamp some guidelines of conduct on the blogosphere, which generally operates according to informal codes and the notion that 'inauthentic' bloggers -- including those not disclosing commercial relationships -- will suffer in the web's court of public opinion."

Blogger reaction has been caustic, less from sympathy toward paid-off bloggers than because of an apparent double standard, since the rules could well apply in print. Elizabeth Spiers, founding editor of Gawker, wrote:

If this were enforced with actual journalists, I know a lot of people who’d be out of a job and/or deeply in debt to the FTC.  At lifestyle magazines in particular, freebies are often the norm, not the exception.  (I don’t think that’s the way it should be, but that’s the way it is.)  But you’ll never see a little asterisk next to a ringing endorsement of this season’s Galliano show that the company happens to outfit the editor-in-chief at zero cost.

Social media news site Mashable is more positive, calling the rules "an update that's time has come":

While most well-run social media programs already include appropriate disclosure, there’s still no shortage of unscrupulous marketers using deceptive practices to sell products. Now, with the threat of serious fines, those who look to push the boundaries of ethical blogging will be doing so at their own risk.

But without doubt, these changes will force profound cultural changes in many corners of the Internet. Bloggers may react defiantly over losing the sense that one's blog or Twitter feed is their own, and to the prospect of being fined for what they write there, or in comments on other sites. The FTC rules even apply to those who post reviews to Amazon or Yelp, if compensated in any way.

On the other hand, many users of social media and those review-driven sites will appreciate the new rules, if they succeed in cleaning up deceptive reviews and sponsored spam.

The group who will be most caught off-guard is likely to be celebrities, rather than average users. Ad Age reports that:

...celebrity endorsers can be held liable for false statements about a product, and all endorsements must include results consumers can "generally expect." Previously, an advertiser could cover their claims by the disclaimer "results not typical." [...]

Specifically covered in the new rules is the use of social media, such as Twitter, by celebrities to endorse a product. That's now a no-no unless the commercial relationship is disclosed. So, too, are celebrity mentions of products in other media, such as talk shows.

A safe prediction for 2010: some big scandal when the first celebrity to run afoul of the new rules, by promoting a product on Twitter or a talk show, gets fined by the FTC.

Comments

Zach United States says:

Why not do this to politicians first?!  Ask them for full disclosure when shilling for the likes of enormous corporate interests instead of the constituents that gave them their jobs.

Just yesterday, Huckabee tells FNC viewers, "You can go to balancecutsave.com -- that's balancecutsave.com."  What he left out, 'Oh yeah and Balancecutsave.com will redirect you to my website, HuckPAC.com.'

The celebrities are NOT the threat here.  Thanks (for nothing) FTC.

October 5, 2009 05:28 PM #

gannon United States says:

yah,do this to politicians first.not just ask us.

March 26, 2010 08:18 AM #

Jatinder Vijh India says:

The issue is not about the law but ethics. The consumer buys products or services endorsed by celebrities in their blogs, either directly or indirectly, thinking that the celebrity himself/herself has used the product/service and is satisfied and hence endorsing it. One wonders if that is actually the fact or is it that the celebrity has never used the product but endorsing it just for the money? Celebrities need to adopt their own code of conduct while endorsing products/services in their blogs. Law is not the answer because law comes into play only after a complaint has been received.

October 6, 2009 06:33 AM #

Arnold Jones United States says:

ummm... where's the branding angle in this?  

October 6, 2009 03:40 PM #

Peter Feld United States says:

Facebook and Twitter are major social media brands, potentially very affected by how they are used commercially. Also, the issue entails brands trying to use celebrities and paid bloggers (e.g. Ford Fiesta) as channels.

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