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FTC Ruling on Blogger Disclosure is OK October 8, 2009

Posted by paulrickett in Social Media, Wine.
Tags: , , , ,
1 comment so far

The US Federal Trade Commission has introduced new guidelines on what bloggers must disclose about their relationship with producers of the products they talk about. The Guide can be read in its entirety hereĀ http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf.

I’ve read through the document as a layman and found it relatively clear about what does apply to blogging and what doesn’t. Works for me. As of December 1st the FTC can levy fines of up to US$11,000 for non-disclosure so there is a real potential cost for non-disclosure.

There has been a lot of moaning within the twitter wine community about this. Shock and horror would be a more appropriate description. Not so much over the fact that there is a requirement to disclose about receiving free samples or, and probably very rarely, being paid to write a review but more over the fact that these new rules don’t apply to traditional media too.

Let’s be clear about this – some bloggers receive more wine as free samples than most of us drink in a year and often don’t review the wines they receive, they just go into their own cellar. I often see tweets saying how much they received – and one blogger declared today he had received 200 bottles so far. That’s pretty good monetization of one’s blog, if you ask me, given that they get to drink the whole bottle in circumstances of their own choosing and in very informal review environments with no editorial oversight. What are 200 bottles worth? Likely several thousand dollars of free wine.

If a winery finds it good PR to send sample bottles to the blogger community then it obviously believes it adds commercial value to their marketing efforts. The new guidelines impose a duty on the winery to ensure that the blogger does disclose their relationship so there may be a little more constraint on issuing freebies now.

The gross irony to me is that these bloggers are lamenting how much it costs them to write the reviews and why they should not be exposed to any risk, yet then flock to seminars on how to monetize their blog. You can’t have it both ways folks. Samples are tax-free monetization, Google Adwords on your site is monetization, advertising on your blog is monetization – you are in business. A nice (and more often hobby) business and one that may not be too terribly profitable, but still a business. You are paid in a different way but essentially a blog post in these circumstances is no different than an article in a publication. And the publications are held to a higher standard both by internal policies and by rules and regulations governing disclosure.

Don’t get me wrong though, blogging about one’s tasting experience is a good thing. In many cases its going to be nearer the average consumer’s actual results than many professionally-written articles. These rules won’t affect the majority of amateur wine bloggers who report on wines they have purchased. Only those receiving samples or being paid in some way will have to disclose. The FTC guidelines are quite clear on this.

The whole point of the new guidelines is to start to lay out rules for advertising and marketing using social media in what has been a totally unregulated and growing medium. As usual it lags behind the trend but its a good and fair start. Of more general interest, it seems to me on reading the guidelines that companies also need to be more careful about what their employees are saying about the products in their own informal social media communications – especially those writing about products with specific performance claims like weight-loss, teeth whitening etc.

And in the interests of fair disclosure: I run a wine store and do receive free samples for use in the store for customer tastings. Most of my tweets about wine are as a result of purchasing the wine myself or from trade tastings where you get a standard 2oz tasting – not a bottle to enjoy at home.

Lastly, I am a Canadian commenting on US regulations so I’m a relatively unbiased (and inexpert) observer – at least for the moment.

http://www.twitter.com/paulrickett

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