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Out-Law News 1 min. read

Bloggers must declare commercial interests under new US rules


US consumer protection regulator the Federal Trade Commission (FTC) has said that from December bloggers must make clear any payment or endorsement from companies whose products they write about. Europe already has similar rules.

The FTC regulates behaviour so that it stays consistent with the Federal Trade Commission Act. It produces guidance designed to help companies keep in line with that Act. It is this guidance which has been changed to protect consumers from reviews by bloggers who have been secretly paid by the producers of goods. The guide affected is the FTC's Guide Concerning the Use of Endorsements and Testimonials in Advertising, it said.

"'Material connections (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed," said an FTC statement. "The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement."

"Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service," the regulator said.

The new guidelines also govern the way that famous people behave on social networking sites. If they promote, even informally, goods or services they will have to disclose any commercial relationship they have with the company behind them.

"The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media," the FTC said.

The UK already has a law that bans misleading actions or omissions by traders. When a trader falsely represents itself as a consumer, or where a paid-for advert is disguised as editorial content, there can be a breach of the Consumer Protection From Unfair Trading Regulations.

"We already have rules in the UK in force that require transparency and if somebody is concealing their motives for a commercial practice, there could be an offence punishable by up to two years in prison, so penalties are tough," said Struan Robertson, a technology law expert at Pinsent Masons, the law firm behind OUT-LAW.COM.

Robertson said that even blogs which are small personal projects could be caught by the Regulations if they derive a benefit from their association with a company and do not disclose it.

"The Regulations give courts a lot of scope to decide what would and would not count as being an unfair commercial practice," he said.

The change to the FTC's guidelines is the first since 1980.

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