The FTC mania

I watched Erin's video and...



I don't agree with it entirely (by the way I Love Erin). The FTC rules come into effect from the 1st of December 2009. Here is an excerpt from pages 4-5.

Example 5: A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services. [See § 255.5.]

In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.

This point clearly says see section 255.5, which is the section on material connections.

Another excerpt from page 3

Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers [see § 255.5]. Endorsers also may be liable for statements made in the course of their endorsements.

I think this is the confusing point. It looks like only the advertisers are liable for non-disclosure.

From Section 255.5, page 12

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge. The manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.

Section 255.5 has an example showing you must disclose if you received stuff for free. The liability part says see section 255.5 and also, that you must disclose if you were paid.

So the conclusion from the paper: If you were paid to post or got the stuff for free, you must disclose that or else you, as well as the advertiser could be liable (unless you don't operate in America).
I do agree that they will be targetting people with many hits and even though the FTC may not have the outright authority to fine an individual blogger, it's the law isn't it? A way will be created because we have been warned. Also, the brand can probably share the liability with you or hold you liable.
Just play it safe and disclose whether or not you think you can be fined.