Bloggers Face $11,000 FTC Fines on Concealed Endorsements

Bloggers could face fines of $11,000 for failing to mention free samples and other payments they receive from advertisers. In theory, the rules could even affect people writing on sites such as Facebook and Twitter, though officials indicate they are unlikely to be targeted.

The rules have been issued by the Federal Trade Commission, or FTC, which says it is merely clarifying existing principles for the Internet age. The relevant guidelines had not previously been updated since 1980.

In explaining the changes, the FTC 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."

Rules Get Personal

Virtually all newspapers, magazines and major websites already have such rules in place through their own policies. However, this is the first time people running personal blogs have been under the same rules. The rules could even cover people who don't consider themselves journalists, posting a review to sites such as Amazon or even a status update on a social networking site.

In theory, anyone who receives a free sample of a product and then writes about it must now disclose the sample, even when writing on a personal page. However, the guidelines say such incidents will be considered on a case-by-case approach. It says the key is whether there is reason to believe the company gave out the free sample because it believes the writer is influential to a substantial audience. (Source: ftc.gov)

Ban Covers Fans

In some cases, people could breach the rules without even writing anything. The FTC told one website that somebody with a large number of followers on Facebook, such as a celebrity, might be in violation simply by joining a fan group on the site for a hotel chain which had given them a complimentary stay. (Source: cnet.com)

However, the FTC appears to be more concerned with educating the public about conflicts of interest rather than punishing people at this stage. It concedes it doesn't have the resources to actively monitor most blogs and will instead focus on investigating complaints.