FTC To Bloggers “That $11,000 Fine is Not True”

Bloggers were scrambling for clarification after the FTC announced its new rules on how disclosure of freebies or endorsements would have to be done. The FTC wants to clean up the way bloggers do business when it comes to being paid or receiving freebies by companies. But what struck home was the ‘$11,000′ fine that made everyone stand up and take notice. The question was how will the FTC handle the fining procedure? The FTC has clarified the fining procedure and in a recent article stated the following information:

We asked a few other prominent bloggers what their biggest concerns were about the news, then we solicited responses to those concerns from Richard Cleland, assistant director, division of advertising practices at the FTC. (You can read the full report at ftc.gov.)

“That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?”

So it would appear that if a blogger is contacted by the FTC, he or she will be able to resolve the situation without being fined. It also seems that fining is a last resort.

What do you think? Will this be good for consumers or as one reader commented recently, be impossible for the FTC to monitor?

Comments welcome.

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I have been writing for LockerGnome since relocating to Missouri seven years ago, where I continue to be a technology enthusiast who enjoys playing with the newest and latest gadgets.

  • Urban Underbrink

    Not sure I understand this completely, but this is Scary! Just what we need – more Control Freaks telling us what we can think or say. How do they propose to control the World? The worst cases of fraud are from little scumbag countries where they are untouchable! If they can’t enforce those criminals, what right do they have to even think they can tell us what we can say? The biggest criminals are in our own Government, and most have been appointed by the Chicago Gangster – Obama.

  • Tinman

    This is about right, creating a consumer protection law without any bite to it, like the anti-spam law. The company’s that use this form of “false advertising” will continue to do so. If one blogger gets “warned”, then they’ll just hire another blogger to give a false “good review”.

  • http://businessmindhacks.com Alex Schleber

    All this silliness will do is create an avenue for malcontents to baselessly attack their competitors. Just because it’s a “3 strikes” system and complaint-based doesn’t make it any less dangerous in this regard.

    BTW, for most small business owners that use the Internet/blogs (is there any other kind left?) to sell their own products and services, the testimonial issue is a much bigger deal than the affiliate disclosure. And here again, the attack angle by way of FTC complaint is disconcerting.

    And the way Big Business, advertisement, and Old Media are apparently exempted from these same onerous terms makes it all the more ludicrous.

    Just because within the black boxes of larger media institutions the lines of influence and reciprocity aren’t as easily visible doesn’t mean that they’re not there.

  • mhz

    The startling thing about this in my opinion is that the FTC thinks they could enforce something like this. Realistically, it would be too expensive to enforce on any consistent basis.

    It would just be a random thing, like getting a speeding ticket. Or like the article said, in response to a complaint from a competitor. Sure everyone was doing it, but someone tattled on you!

    They would have to start from the marketing company end, demanding a list of who got paid and how much, then starting with that person’s web site, scouring content and related links for “opinion-related” content.

    I mean, I hate false reviews as much as anyone, but good grief. I don’t buy anything based on one person’s review. It has to be overwhelmingly positive, from many people. But I would be mad if I found out about mass skullduggery in product reviews, leading me to purchase a lousy product.

    Still, I wonder if the FTC has staff (or a super-genius software algorith?) that can hope to monitor such things fairly and effectively.

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  • http://www.facebook.com/greg.zeng Greg Zeng

    ” It also seems that fining is a last resort”. That is wonderful news. Business as usual, with unexpected small costs.
    In Australia we watch how the USA’s military-industrial complexes manipulate manipulates USA business against the Australian-born Wikileaks founder. It shows how powerless real governments are with ‘free’ unaccountable enterprises.
    Oops – I forgot: Guantanamo Bay detention camp was nothing to do with the USA government, so the government cannot close it. And USA business is not controlled by the USA government, so they cannot maintain business interactions with Wikileaks. And the white projections of the communist-controlled Huawei telecoms manufacturer are so true. These truths I must believe, else I be kidnapped to somewhere towards Cuba.
    Just as well you have free speech in the USA. By law, regulation, practice & the Constitution of Australia, we do not have free speech.