Blogs, The FTC, and Disclosure

Controversy has been swirling since the Federal Trade Commission (FTC) issued its revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising" which applies regulations regarding endorsements and testimonials to online publications including blogs and social networking applications like Facebook and Twitter. The FTC maintains that people writing online should disclose any material relation with the sellers of a product or service. For instance, someone posting a book review should reveal whether they received the book, other goods, or compensation from that book's publisher. The goal is to apply truth in advertising to bloggers and other online publishers.

An opinion piece in today's Wall Street Journal (October 19, 2009) "Bloggers Mugged by Regulators"by Information Age columnist L. Gordon Crovitz raises serious questions about the effect of these guidelines on the First Amendment Right to Free Speech. Should people writing on the Internet have less freedom than those writing in other media? The Wall Street Journal daily publishes a book review; the authors of these reviews do not reveal their relationship to the publisher or author of the book or whether they received a copy of the book for free. Should writers on the web be required to make a disclosure?

On the other hand, bloggers who receive payment for product endorsements are advertising, and shouldn't they come under the same regulations as other advertisers? See Is that blogger review really a paid ad? The FTC wants to know on ConsumerReports.org for a discussion on this topic.

A full analyis of the FTC Guides and their implication for bloggers can be found at Andy Sernovitz blog. Sernovitz, the author of Word of Mouth Marketing, is an expert on interactive marketing.

For the record, I do not receive compensation, payment, or free samples from the publishers or manufacturers of any of the products I discuss in my blog. All book reviews and demonstrations of Web 2.0 applications are based solely on my experience with these products, and are in no way, shape, or form paid advertising.