At the beginning of October the FTC announced they had approved the final revisions to it’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. Shortly thereafter, they released the full text of this new law and the problems were immediately apparent.
In brief, this law requires all bloggers to disclose any material relationships behind reviews and giveaways-which is in itself a good policy that most review and giveaway bloggers already do on their own. [You can see my disclosure directly under my header.] This law also requires bloggers to apply to 'truth in advertising' standards, which again is a good policy and again is already practiced by most bloggers.
Here's the real problem-if a blogger makes a claim about a product that is considered "unsubstantiated" the advertiser is liable. This is an example, directly from the FTC guidelines:
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 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 misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to
liability for misleading or unsubstantiated 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.
So the question becomes, what constitutes unsubstantiated claims? If I review a candle and I said I find the smell "relaxing" is that unsubstantiated, since that is not scientifically documented? The new rules say it could be-and if it were determined in a court of law that it was not only would I personally be subject to an $11,000 fine but the advertiser would have to pay out as well.
This effects bloggers tremendously-if a company sends it's product for review or giveaway to another company the advertiser is NOT liable for any unsubstantiated or misleading claims, but if they send their product to a blogger they could have to pay, big time. For the record, this law also includes all "endorsements" posted on Twitter, Amazon, Facebook, or any other online venue.
This new law discourages companies from seeking to advertise online directly through consumers and, let's be honest, severely hampers bloggers attempting to make some money via their sites. It takes even more power away from the consumer, who is now liable for their own personal opinions, and makes endorsements a business-to-business transaction.
This is bad news.
Still, even after reading this law, I will continue to do giveaways...provided that companies and advertisers are still willing to work with me (or any other blogger for that matter)...because I still feel that the best, most powerful form of advertising should be the friend to friend, word of mouth, consumer powered kind and that you, my readers, should still win free stuff for being so fabulous.
Free stuff like the Personalized Tote from Noah Baby Boutique that I am giving away through 10/24. It's fabulous and I endorse it. Come and get me FTC.