Bloggers Making Endorsements Must Disclose Corporate Payments or Face Fines

October 6, 2009

(ChattahBox)— The Federal Trade Commission issued new rules for Internet endorsements on Monday, recognizing the need to reign in blogger testimonials that may be tainted by hidden corporate ties. The FTC now mandates that bloggers offering endorsements must disclose any payments received from the subject of their reviews, or risk paying penalties up to $11,000 for each violation.

The new consumer protection rules serve to uncover corporate payments made to bloggers, research firms and celebrities when promoting a product, to provide the consumer with full disclosure.

As the Internet has expanded offering product information and reviews, consumers had no way to determine if such information was “real” or was a paid advertisement. The FTC rules on such practices had not been updated in nearly 30 years and failed to provide a regulatory framework to effectively deal with Web-based social media endorsements.

Richard Cleland, assistant director for FTC’s division of advertising practices said, “Given that social media has become such a significant player in the advertising area, we thought it was necessary to address social media as well.”

The new rules make clear that bloggers receiving cash or an in-kind payment to review a product are making an endorsement for that product. And bloggers making endorsements “must disclose the material connections they share with the seller of the product or service,” said the FTC in its press release.

The new rules also clamp down on the practice of advertiser funded studies, cited to bolster product claims. Any financial ties must now be disclosed when companies use the findings of a research organization they fund.

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One Response to “Bloggers Making Endorsements Must Disclose Corporate Payments or Face Fines”

  1. Valuable Internet Information » Bloggers Making Endorsements Must Disclose Corporate Payments or … on October 7th, 2009 7:21 am

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