$11,000 Fine for Affiliates and Bloggers from FTC
The FTC has released a revised guide to advertisers, bloggers and affiliates. The guide is intended to ‘help’ advertisers ensure they remain within the restrictions of the Federal Trade Commission Act. The FTC notes that the guide is:
“…[An] administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.”
While the law itself has not seemed to have changed in any way, the interpretation of the law obviously has since the creation of the act in 1980. Bloggers should take note of the new ‘guide’, because if the FTC finds you in violation of the FTC Act you can face a fine up to $11,000.
Bloggers and affiliates should pay close attention to the material connections portion of the revised guide, which urges bloggers who review or endorse any product or service to disclose any connection where the blogger may receive payment, free product or any other ‘material connection’ that the visitor would not expect.
Of course “material connection”, “review”, “endorsement” and “visitor would not expect” are all up for interpretation, however the safest course of action is to simply offer a disclosure of any such relationship, otherwise you may be trying to argue your interpretation in court or paying $11,000.
What is an endorsement according to the FTC?
“[A]n endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.”
Summary of Changes:
Testimonial Advertisements: “Results Not Typical”
When offering testimonials for products or services, advertisers can no longer use the phrase “results not typical” as a safe harbor.
Bloggers: “Material Connections”
If the blogger receives any payments, free-product or any material connections that consumers would not expect, that information must be disclosed.
Celebrities: “Celebrity Endorsers”
Until now, no law clearly stated that endorsers and advertisers could be held liable for “false or unsubstantiated claims”, nor did celebrities have to disclose any relationship with advertisers.
Ironically the guide is supposed to change December 1, 2009 the same day the UIGEA begins full force.
