FTC to monitor sponsored posts

October 6, 2009

image from Flickr user antigone78

Food bloggers: have you ever received a free cookbook or a great new product to review? The Federal Trade Commission (FTC) is watching you. The FTC voted unanimously on Monday to revise their Guides Concerning the Use of Endorsements and Testimonials in Advertising ("the Guides"); the changes, which go into effect December 1, will penalize bloggers for not disclosing relationships with sponsors or for posting false claims about a product. The eponymous FTC Act established the Commission in 1914, a time when large companies like Standard Oil and the railroad monopoly controlled American business.

The FTC's original mission was to encourage competition, which has evolved over the years to consumer protection. This includes regulating advertising and all the tricky ways ad men have convinced, persuaded and coerced the public to buy their products over the years. The Guides prohibit advertisements from making false or deceptive claims; they are not in and of themselves laws, but they provide real-world interpretations of the FTC Act. The Guides were first written in 1975 and last updated in 1980, and much has changed since then. Print, radio and television are no longer the only ways people communicate- or advertise. Advertisers look to blogs and social media platforms like Facebook and Twitter for cheap sources of positive press, a practice known as "sponsored posts:" companies give a blogger a product to review, sometimes sweetening the deal with cash, and the blogger writes a positive review that may or may not reflect their actual experience with the product. In the eyes of the FTC, and many bloggers and readers, a review that does not accurately reflect the endorser’s experience is dishonest, as is a review that presents the endorser as an actual customer while in fact he or she a paid spokesperson. A reader needs to know the blogger’s entire investment in a product in order to make an informed decision about a product, and cannot do so without full disclosure. Even if the blogger believes they are completely objective, their review becomes biased the moment money enters the picture.

As an example, a company offered me a product (a home brewing kit) worth $100 in exchange for a review earlier this year; I jumped at the opportunity and had a wonderful experience. However, though I clearly stated that the kit was a gift from the company, I hesitated to write a completely positive review for fear of ruining my credibility. I actively searched for criticism. However, the small complaints I had with a free product may have been more significant with a product purchased out of my own pocket. Therefore, while my review appeared balanced and fair, I will never know if it really was. Many bloggers already believe in transparency and freely disclose relationships with sponsors. Does this mean you can no longer accept free products or receive monetary compensation for positive reviews? No, but it does require that you disclose the relationship and make accurate claims. The penalties are high: the New York Times reports the FTC plans on fining violators up to $11,000. Therefore, if a sponsor offers you a free cookbook or handy kitchen gadget, you do not necessarily need to refuse: be transparent in your connections and honest in your review, and do not post anything that does not accurately reflect your experience. As the lines between blogging and traditional journalism blur, bloggers are becoming more and more respected as legitimate sources of information. The FTC's new guidelines can only help this progression.

For more information and additional perspectives, read the articles on this topic in the New York Times, the Huffington Post, and Mashable.



Ashley Margolis's picture

there has to be more important problems the FTC can latch on to ... say going after monopolies that stifle competition or are engaged in transparent cabal-like price fixing ?, take your pick ... cable companies .. utilities .. Microsoft .. ?

Barnaby Dorfman's picture

Great post helen...I love it when someone finds a reason to use the word "eponymous." On a moe serious note, while I'm not in favor of any additional bureaucracy, I do think more transparancy and disclosure is a good thing. We talked a bit about this in the legal panel earlier this year at the International Food Blogger Conference (http://www.foodista.com/ifbc/2009/06/the-ifbc-podcast-session-6-writing-%E2%80%9Cthe-law-and-ethics-in-blogging%E2%80%9D/) Now that the law has evolved into something more concrete, we'll be looking into new ways to help food bloggers comply.