FTC Declares Bloggers Must Disclose Paid Endorsements
The Federal Trade Commission revises rules for advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act and for the first time requires bloggers to disclose any material connections they share with the seller of the product or service.The Federal Trade Commission issued new guidelines Oct. 9 that require bloggers receiving cash or an in-kind payment for product reviews to disclose the connections they share with the seller of the product or service. The rules are part of a wider effort by the FTC to redefine disclosure requirements between endorsers and advertisers.
The rule changes are the first in almost 30 years to address the relationship between reviewers or endorsers of a product and the first to include bloggers. The revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, 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.
"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," The FTC said in a statement. "Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service."
The FTC did not specify the manner in which bloggers must make their material connections available to readers. The rules take effect Dec. 1 and penalties include a possible $11,000 per violation.