FTC sheds light on blogger endorsement policies after dismissal of first action
It’s been several months since the Federal Trade Commission established rules requiring bloggers to disclose any gifts or graft they may have gotten from the companies they are blogging about. The initial announcement created quite a stir and there is still a lot of uncertainty about the rules. The FTC’s recently-published guidelines help.
It seems to me the FTC rules concern in-house counsel more than anything else about social media. Computer Maker Company decides to get on the social media bandwagon, establishes its own blog, creates a Facebook page and asks its employees to participate. Well, when the employees post on the Facebook Fan page, do they have to disclose they are employees? After all, they are getting paid for their services, although they are not getting any extra compensation to make posts. Let’s say you give the newest laptops to all of your sales force. Does the company have to know if any of the sales staff have personal blogs so they can make sure they aren’t ”endorsing” the company’s products without fully disclosing the fact the computer was given to them or that they are company employees?
Because lawyers are naturally risk-adverse, it is these issue that keep them up at night. Rather than reading broad guidelines from the FTC, lawyers want to know what has already happened and what did the FTC do about it. Thanks to Ann Taylor Loft, now we know.
Here is the official announcement about the closing of the investigation. It all started when Ann Taylor threw a party to preview their summer clothes. Bloggers (not sure if they were singled out or if everyone in attendance) were given gifts. Apparently, not every blogger disclosed the fact they were given gifts when they wrote about the party and/or the summer collection.
The FTC dropped the investigation citing the fact this seemed to be an isolated incident, there was only one party, only a few people posted about it and some of them made the disclosure, Ann Taylor had a written blogging policy (albeit after the fact) and there was a sign at the event reminding bloggers to make the disclosure. On the other hand, the FTC clearly put the onus of compliance on the advertisers and not the individual bloggers. You can read more about it from Ad Law By Request and Professor Goldman and Chris Vail.
So what is the takeaway?
1.Have a written policy that covers both targeted efforts with outside bloggers and for your employees to address the questions raised above.
2.Anytime a gift is sent to a blogger, include a written reminder of the notice requirements in the package.
3.Use some effort to monitor bloggers you know have received something of value who are blogging about your products.
4.There are programs that provide shorthand disclosure notices for folks concerned about the limitations of Facebook and Twitter. CMP.ly is just one example.
5.Know the FTC is watching. This was a small event that resulted in only a few posts.
I am usually an advocate of less regulation online, but I would not have minded if the FTC would have really come down and simply shut Ann Taylor and Ann Taylor LOFT down for good. It’s not because I think they were deceitful or did anything wrong here. After all, don’t you think the traditional press that covers similar events comes away with at least a gift bag or something? It’s because my wife simply shops there too darn much. If that is an indirect endorsement from my wife, I can assure you I am not receiving any payments from Ann Taylor. I will, however, gladly disclose it if they choose to take care of my credit card bill.