A blog by the Brick Factory The Brick Factory

Bloggers to be Subject to FTC Endorsement Disclosure Laws

The Federal Trade Commission Monday released revised regulations holding bloggers responsible for disclosing any freebies or payment associated with their writing.

“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 regulations may have widespread ramifications considering the millions of bloggers and the variety of their audiences. The Associated Press reported Monday bloggers who are caught without providing this disclosure could face $11,000 penalties after the regulations go into effect Dec. 1, 2010.

The disclosure is very similar to the Federal Communication Commission’s Payola Rules for broadcast media, which state that “all sponsored material must be explicitly identified at the time of broadcast as paid for and by whom, except when it is clear that the mention of a product or service constitutes sponsorship identification.”

This update to the FTC’s regulations on testimonials and endorsements is the first since 1980. While the regulations don’t declare how disclosures must be made, they must be “clear and conspicuous,” the AP reported.

Some bloggers touted the new regulations and welcomed recognition of their presence in mass marketing. Others, however, worried the rules would be too difficult to enforce and would lead to favoritism.

MediaBistro’s GalleyCat blog listed several difficult questions and potential problematic areas with the new regulations, including questions about liability if a blogger is writing for a news organization.

“If an unpaid blogger at the Huffington Post ‘endorses’ a consumer product without meeting the FTC guidelines for disclosure of ‘material connections’ to the makers of that consumer product, who’s liable: the blogger or the Huffington Post?” the post asks.

While the new regulations specifically refer to the expansion of regulations on blogs, the FTC also tightened rules on celebrity endorsements, which include mentions in Twitter streams or social networks.

“Along with advertisers, stars can be held liable for making false and misleading claims about a product under the new rules,” the New York Post reported.