On this page, we look at some areas where it is not entirely clear how the FTC's Guidelines will apply to online publishing activities:
The Occasional Freebie. Perhaps the most troubling gray area is whether you have to disclose your "relationship" with a company that sends you a freebie once in a while in anticipation of your writing a review about it, but with whom you have no other formal ties. It is not clear how the FTC will deal with this situation.
One thing we know is that when the random, occasional freebie becomes a steady, predictable stream of free products, then it's time to disclose the relationship. The Blog of LegalTimes reports:
Engle did acknowledge a substantial gray area when it comes to blogging. If a blogger received an occasional free sample and happened to write something positive, she said, “that’s not something we think would change the expectation of the audience,” and might not require disclosure. But if at some point it became a steady stream of freebies, then disclosure would be called for. “It’s not burdensome and it’s not hard,” she said.
Just how many free items will trigger the obligation is difficult to say. FTC staffer Stacey Ferguson has some good advice: "When in doubt, disclose freebies."
Besides the frequency of receipt, another important factor is the value of the freebie. The more expensive the item, the more likely your receipt of it requires disclosure. Example 7 under § 255.5 of the Guidelines reinforces this view:
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.
Guides, at 12 (emphasis added). The blogger in the example doesn't have an established arrangement with the gaming company; he doesn't get paid in cash, and it doesn't look like we're dealing with a "steady stream" of freebies. But it's also not a purely isolated occasion—the hypothetical carefully notes that the manufacture has sent gaming systems in the past (how many times, we don't know). Here, what seems to drive the disclosure requirement is the value of the gaming system. It's worth a lot of money and could conceivably be enough to skew the blogger's review. A comment by Stacey Ferguson in the December 1 panel discussion supports this view:
Free products should be disclosed because they can be considered compensation on a fact-specific basis. Depends on the value of the product—is it enough to push the consumer towards a positive review?
Just how expensive an items needs to be is not clear. Repeat the mantra: "When in doubt, disclose freebies."
Affiliate Links. The Guidelines don't say a whole lot about this, but some statements by FTC staff suggest that the agency believes that affiliate links may require disclosure of the blogger or website operator's relationship with the affiliate sponsor.
Given this uncertainty, it might be a good idea to disclose your participation in an affiliate program on a "disclosures and relationships" page or section. The fashion blog Deep Glamour provides a sardonic example of how to handle the disclosure:
DeepGlamour is an Amazon
affiliate. Virginia Postrel receives a percentage of the purchase price on anything you buy through one of our Amazon
The Federal Trade Commission demands that we tell you this—they think you're idiots and are violating the First Amendment with their regulation of what bloggers publish—but it's also a friendly reminder to Support DeepGlamour by starting all your Amazon
Something more concise, like “Disclosure: Compensated Affiliate” will also suffice on a link-by-link basis, according to the Affilliate Marketing Blog.
No disclosure is required for ordinary advertisements that clearly look like ads. See Karen Brunet: New FTC Rules and Guidelines - How Does This Apply to Advertising?
Negative Reviews. While it is not 100% clear that disclosure is only required for positive reviews, common sense and the plain meaning of the words "endorsement" and "advertising message" suggest that the FTC won't be paying attention to good-faith negative reviews. Employees of a competitor who engage in astroturfing could run afoul of the FTC Act with negative content, however.
