FTC Rules to fine Bloggers up to $11,000

The Federal Trade Commission (FTC) has updated their rules to include a stiff penalty to bloggers (and even Twitterers/Tweeple) who do not disclose their interests with commercial products and/or services.

That means any recommendations by bloggers on products/services they feature on their blogs will be scrutinized if they do not disclose compensation. The “compensation” may be in cash or in kind. The “in kind” is not specified but may include free products, free meals, trips and hotel accommodations.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.

The revised Guides specify that while decisions will be reached on a case-by-case basis, 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. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

This new rule will be in effect by December 1, 2009. Though this does not involve bloggers in the Philippines, it’s not improbable that the DTI might also do the same around here anytime soon.

More about the press release here.