FTC Regulations: What It Means For Bloggers That Get Free Stuff To Review

by Robb Sutton

Over the past couple of weeks, bloggers have seen headlines on new stations and papers like The Wall Street Journal. Recently, the FTC passed a new law that is going to go in affect on December 1, 2009. This law is aimed at the transparency of bloggers and celebrities as it relates to free products, paid reviews and brand promotion. As you guys already know, I am the self proclaimed “get as much free stuff to review on your blog as you can” guy that has gotten in over 6 figures in free stuff to review on my blogs. Now, some of that product is returned but a lot of it isn’t. I have been as trasparant about that in my blogging and my eBook, Ramped Reviews, as I can, but how are these new laws going to affect how we run our blogs and the free product we review?

The New FTC Regulations About Free Stuff

Before we get into my opinion and what this means for you…let’s take a look at what the new laws and regulations actually say. Luckily for us…Jeremy at Shoemoney.com and others (including John Chow) got together to go over what these new regulations actually mean and how it affects us as bloggers who like to get in free stuff to review on our blogs. As they quickly found out (click here for the Shoemoney article), the new regulations do not say much of anything. The cornerstone around the entire idea is to get bloggers and celebrities to disclose paid endorsements and reviews. This includes the use of free product for review purposes.

On the outside…that is not really that big of a deal right now. For you…the review blogger…that means you have to now have a disclaimer that specifies whether or not you keep what you are reviewing and if you were paid to review. However, it is not clear in the regulations how you are supposed to accomplish this. Are we supposed to disclose this information on every article? Will a disclaimer page linked in the footer work? Do we have to change existing content and reviews? None of that is clearly outlined in the regs.

For now…I believe a disclaimer linked in the footer should make you legal, but time will tell.

Actual FTC document can be found by clicking here…but like most government docs…it includes a bunch of language that doesn’t really mean much of anything.

U.S. Seeks To Restrict Gifts Made To Bloggers

In this article by the Wall Street Journal (Oct. 6, 2009), they examine the new FTC regs and how they affect bloggers.

Opening line:

The government wants to make it a little bit harder for bloggers to shill products online for fun and profit.

The article basically gives information about the rules and why the FTC is trying to regulate the blogging industry. Some are arguing that it is a issue of ethics and not law…while the FTC is arguing that it needs to protect consumers against false positive reviews that are influenced by free product. The article uses two examples – Microsoft giving out laptops and one blogger getting a car and gas card from Ford (how do I get on that list?!) – where positive press was given from a large corporation giving away something of large value. Since they view those as false claims (kind of a hard call to make), they believe that is a federal offense if the relationship is not disclosed publicly to the tune of $11,000.

You Can Thank Those That Broke The Rules

As Jeremy pointed out from the actual document, the FTC is really going to crack down on false claims by bloggers. Basically, you can thank the affiliate marketers out there that make outlandish claims to sell more affiliate product for the microscope. As always…the people that play by the rules are punished just like those who don’t. Do yourself a favor and keep everything honest, open and transparent. If you do that, then you have nothing to worry about.

From the actual document:

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

What Do I Think About The New FTC Rules?

I am a little biased but I think it is a launching pad for future tax revenue. If the government wants to record all of your disclosures for the purpose of tax revenue, that is one more outlet that they can attempt to collect from you as the blogger. Also, who is going to eventually place the value on these goods? Retail value? Manufacturers cost?

Luckily…I think the FTC is going to find that regulating a global industry like blogging is going to prove to be next to impossible. How many of your favorite blogs are located outside of the US? They do not have to conform to the same rules and regulations passed by the FTC. So…I see these fake and biased blogs doing much what the online gambling industry did by moving their corporations to a country who does not care.

I have zero issue with publicly disclosing that I receive free stuff to review on my blogs. My reviews are open and honest no matter what the agreement and I have made a good living at teaching others how to accomplish what I have – the honest way – with Ramped Reviews.

My worry is that it is now going to be harder for bloggers to receive free product for review purposes on their blogs because other bloggers broke the rules. Blogs provide a fantastic resource for consumers to get up front and honest reviews from a non-biased source. Unfortunately, 99% of bloggers do not have the budget to purchase the products in their niche for review purposes. If the FTC does its best to scare companies from participating in the blogging review process, it could mean drastic decreases in revenue and traffic for some blogs.

We will have to see how this all plays out, but – for now – I think a simple disclosure page will get you out of trouble and keep you within the new rules. Other than that…I think it is going to be extremely hard for the FTC to enforce these new regulations.


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Elie Kochman October 13, 2009 - 4:31 pm

Another great article, Rob. The policy as it stands now is probably a good idea – if you’re being compensated to make a review, let your readers know so that they can understand any bias you may have. On the other hand, this has the potential to get out of hand with excessive regulation. (Reporting what you are given to the government is not excessive, by the way. You technically have to report it already for tax purposes, though you may currently find it easy to get away without disclosing these “gifts”.)

As you said – we’ll have to see how this plays out.

Robb Sutton October 13, 2009 - 5:21 pm

Thanks Elie.

According to my accountant…and the others I have spoke with…review product is only claimed under your taxes if the appropriate paperwork is provided by the review product company. Maybe that is what they are ultimately going to enforce.

Without the paperwork, there is no way to attach value.

Elie Kochman October 13, 2009 - 5:33 pm

Interesting. I wonder if it’s the same way here in Canada. I’ll check with my accountant.

Mike October 13, 2009 - 9:59 pm

I’ll probably be adding something to the footer of my site or on a TOS page. I found it all pretty unclear.

Overall, I really agree with your opinion on the new FTC rules. The only thing that I really don’t like is that it leaves out magazines and other print media that don’t have disclose. That seems a little unfair to me.

Robb Sutton October 14, 2009 - 8:48 am

A friend of mine sent me this article that addresses some of that with an interview with an FTC representative. What the FTC guy says doesn’t even really make sense.


Elie Kochman on Business and Networking » New FTC Regulations October 14, 2009 - 7:27 am

[…] compensation for work done, you have to report that as income. Robb Sutton pointed out to me in his article, published yesterday, that in the U.S. this reporting is only required if the paying company […]

Sardar Mohkim Khan October 15, 2009 - 12:46 am

Sounds good, but this will have quite a drawback, primarily for blogger who have been providing quality reviews for products and as you said almost all the bloggers can not buy the devices and without a device at hand, there is nothing useful coming out except for the news that a particular device is coming out. I think overall it will prove pretty bad, and will leave the review for only a few recognized blogs out there.

Robb Sutton October 15, 2009 - 8:13 pm

That is my biggest fear behind the new rules.

Travel gear reviewer October 15, 2009 - 6:42 pm

One thing I don’t get in all this is, what about print or TV reviewers? I know at least a dozen that get virtually everything for free in their niche: CDs, concert tickets, golf clubs, greens fees, a new car every two weeks, the equivalent of a new wardrobe every month or two, wine, etc. Why would bloggers be targeted and not any publication that reviews anything? Apart from Consumer Reports, who buys everything they write about?

Robb Sutton October 15, 2009 - 8:13 pm

Their argument is that the companies that own the newspapers and TV stations self regulate their people. We all know this isn’t true…but it is the FTC’s excuse.

Scarlett Morgan July 9, 2010 - 1:55 am

i am always looking for some free stuffs over the internet. there are also some companies which gives free samples.”..

Eyeonmodel Fr May 11, 2011 - 8:39 am

This is really a great post and you have summed up my feelings about
the whole ruling in a much better way than I could. I really don’t mind
the whole bit about disclosure and although I’ve only really done one
product review, I did inform readers that the product was sent to me by
the company. And yest, I have found that many more of the bloggers
whose sites I read are much better and more honest about disclosure
than the established media has ever been. I do think it’s because
agencies like the FTC and the like don’t don’t know how to really
bloggers and since it’s still pretty “Wild West” out there, it’s just one way of them trying to regulate how we operate.

get stuff for free/

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