Proposed FTC Guidelines & How They Affect Affiliates & Bloggers

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  • June 22, 2009
Patrick Altoft

Patrick Altoft

Director of Strategy

The FTC is apparently planning to monitor blogs for paid reviews under new regulations (pdf) that could come into force (in one form or another) this summer.

Lots of bloggers do paid reviews and even more make money from affiliate links so this is a major issue. However it’s not just bloggers who are at risk here – advertisers and merchants giving the affiliate commissions are liable for anything a blogger writes about their product.

The practice has grown to the degree that the Federal Trade Commission is paying attention. New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest.

It would be the first time the FTC tries to patrol systematically what bloggers say and do online. The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.

The UK has some similar regulations called the Consumer Protection from Unfair Trading Regulations 2008 which require disclosure on affiliate links and sponsored editorial content. So far these don’t seem to have been enforced which begs the question, why were they created in the first place?

Are affiliate networks being asked to force affiliates to disclose all links? Not as far as I know.

How can a merchant be held liable for the actions of an affiliate? Some have thousands of affiliates all writing 1 blog posts a day – who is supposed to police that?

Below is an example from the proposed FTC regulations:

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 70 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 false or unsubstantiated statements made through the blogger’s endorsement.

The blogger also is subject to liability for 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.

The FTC is offering advice to advertisers suggesting that to reduce liability they provide training to bloggers and monitor all blog posts to ensure that they are accurate.

What do you think, will you disclose affiliate links?

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