FTC Cracks Down On Blogger Payola

The U.S. Federal Trade Commission has plans to crack down on blogosphere payola with guidelines that would impose penalties on bloggers who promote products without adequate disclosure.

The guidelines, expected to be released later this summer, would clarify that the FTC could pursue and penalize bloggers, as well as the companies which compensate them, for any false claims or failure to disclose conflicts of interest, according to The Associate Press.

The new FTC guidelines represent the first time a government agency is attempting to hold bloggers accountable for the content they produce, essentially preventing organizations from paying bloggers to endorse products or services and passing it off as objective commentary.

Supporters also contend that the guidelines would bring a badly needed uniform standard to the blogosphere.

"If you walk into a department store, you know the (sales) clerk is a clerk," said Rich Cleland, assistant director in the FTC's division of advertising practices, to the AP. "Online if you think that somebody is providing you with independent advice and... they have an economic motive for what they're saying, that's information a consumer should know."

Journalists who work for established news organizations are often not allowed to accept payments or gifts from marketers. Such organizations often have stringent policies in order to reduce conflicts of interest and ensure and maintain credibility with their respective audiences.

But there is no such across-the-board ethical standard for bloggers, who, until now, have not been subject to regulation for the content they generate. While some established blogs have published disclosure policies, such guidelines are not mandatory and bloggers can receive gifts or money in exchange for positive reviews or endorsements.

Until now, bloggers have enjoyed the ability to post content at their discretion without restrictions. Meanwhile, critics of the new impending restrictions say that FTC intervention would put too much pressure on bloggers to "prove" the authenticity of their endorsements or opinions, which would ultimately serve to limit the open nature of blog content.

While the FTC's Guides don't prohibit blogger endorsement, they scrutinize the genuineness of the endorser, mandating that they be someone, "who, as a result of experience, study or training, possesses knowledge of a particular subject that is superior to that generally acquired by ordinary individuals," according to an FTC document.

According to the Guides, the FTC will soon require that "endorsements must reflect the honest opinions, findings, beliefs or experience of the endorser" and may not "contain representations that would be deceptive, or could not be substantiated, if made directly by the advertiser."

Among other things, the Guides state that advertisements featuring "consumer endorsements" should utilize actual consumers. If there is a conflict of interest, endorsing bloggers are required to clearly publish the connection.

Meanwhile, bloggers could be forced to pay restitution to consumers or even face civil penalties for failing to adhere to the new restrictions.