Federal Trade Commission to Regulate Blogs, Twitter

Soon, Bloggers Must Give Full Disclosure
New York Times

"The F.T.C. said that beginning on Dec. 1, bloggers who review products must disclose any connection with advertisers, including, in most cases, the receipt of free products and whether or not they were paid in any way by advertisers, as occurs frequently. The new rules also take aim at celebrities, who will now need to disclose any ties to companies, should they promote products on a talk show or on Twitter. A second major change, which was not aimed specifically at bloggers or social media, was to eliminate the ability of advertisers to gush about results that differ from what is typical — for instance, from a weight loss supplement."

"“If a product is provided to bloggers, the F.T.C. will consider that, in most cases, to be a material connection even if the advertiser has no control over the content of the blogs," said a lobbyist."

What this means for marketers:

• Nothing at all! The burden seems to be entirely on bloggers.
• Bloggers may clam up initially. Though the regulation will apply to all bloggers, as with any other federal regulation, enforcement will be isolated to highly trafficked blogs and to those instances in which a blog reader reports an infringement or sues. Like all social networks, blogging caters to niches. Few blogs are so big that they will come into the FTC's radar. I think we can expect business as usual for the majority of blogs that cater to niche readerships.
  

What this means for bloggers:

• The burden is on bloggers, not publicists, to disclose that they received a product for free. But how? Will bloggers be required to disclose on every post? Can a blog post a disclosure disclaimer on its About page and consider itself compliant?
  
• This article does not refer to a value minimum for disclosure. All free products require disclosure.
  
• What about products reviewed and then returned to the manufacturer?
• This new regulation says that bloggers must disclose to readers when they receive a free product or payment to review a product. What about when a marketer provides both free samples to a blogger and also advertises on that blog? Is it possible to separate editorial from advertising when just one person manages both efforts?
• What will happen to spamblogs, blogs which republish product descriptions in order to capture search engine results and earn money through retail affiliate programs? Spamblogs have no "person" running them, but they use the blog platform to earn a buck.

This regulation is win-neutral-lose. Consumers should benefit from full disclosure about possible conflicts of interest. Unscrupulous manufacturers, the ones paying bloggers to review their products favorably, will lose an unethical way to advertise. The majority of manufacturers should benefit in the long run from more trust with consumers.

Many bloggers will lose big, especially the ones accepting payments. This regulation will put some blogs out of business, but given the seemingly endless supply of them, this seems like a small loss to society.

For the idea of blogging, this regulation is a big win. While many bloggers will lose income, this regulation represents a return--at least idealistically--to the spiritual roots of the blog.

Update March 25, 2010: the FTC's announcement and the FTC's actual guidelines (pdf).