Sunday, October 18, 2009
FTC Rules, Regs and Guides from Kidlitcon 09
What better way to start my posts from Kidlitcon 09 than with a report on the FTC?
Mary Engle, Associate Director for Advertising Practices, from the Federal Trade Commission spoke at the Kidlitcon on Saturday.
Engle began with a brief explanation of the FTC and the difference between rules, regulations, and guides. What is currently being discussed among the blogosphere are the guidelines, not rules or regulations.
The FTC's concern is about endorsements that are really an advertising message; so when there is an advertiser and endorser, there is a need to disclose. Engle's specific examples were about pills (i.e., "this pill cures cancer!" or your doctor prescribing a medication and not disclosing he/she is receiving money from the drug company) and pay-for-post or pay-for-tweet situations. It's not so much that these things cannot be said -- as when they are, the relationship with the marketer must be disclosed.
Engle then specifically said there is a difference between a product review place and a place that is part of a marketing review program. So reviews are not endorsements as the FTC sees it. (Also? the way the FTC uses the word "compensation" is not the way the IRS uses it. Sadly, or happily, I totally understand that, being the former lawyer. It's not just words that matter; it's how we use them and what our definitions are.)
Again -- the types of reviews here are not endorsements so under the FTC guide no disclosure is needed. (On a personal note, I will continue to say where I got the book I review for the same reasons I always have -- transparency and readers who are unaware that publishers provide such copies). It was specifically asked if receiving review copies had to be disclosed. The answer? No, not if you're an independent reviewer.
Now, as for Amazon Affiliates....
Before I get to that, Engle noted she is not giving legal advice but explaining things. She noted that the book blogs were part of an "unintentional sweep," almost; and that FAQs are coming. They don't want to be patrolling the blogosphere; and should something arise, the FTC's concern is with the ADVERTISER. NOT the blogger.
Engle further noted that the FTC looks at an industry, industry practice, what consumers think and believe, etc., in making its determinations about advertiser, endorser, and necessary disclosures. Such things are dependent on the industry; and also on the facts.
Back to Amazon Affiliates and other instances where a blog gets money if a book is purchased through the site. While the FTC would need to examine the industry, Engle said she believed that, if the consumer didn't know the blogger was making money off the sale, this type of thing WOULD have to be disclosed to the consumer. Later, when I spoke with her a bit more about this, she noted that the FTC does not just look at the majority of consumers but also considers a significant minority of consumers. It is NOT "buyer beware." She was very open and clear about this -- so, if 24 of 100 consumers would read your blog, not know that link to Amazon/other bookseller meant you received money, and thought that was material? Then yes, you would need to disclose and do so prominently. So the fact that a blogger is making money via book sales, even if it is a small amount, should be disclosed to the consumer; and such disclosure should by per post. Information in a sidebar or "about" section would not be enough. (Paragraph edited because I don't think I was clear enough. Significant additions are in italics.)
While I'll do my best to answer any questions, Engle only spoke for a half hour. Also, she made clear that the FTC would examine industries, understand how that industry works, and things would be fact and industry specific. So, in other words, it's going to be really hard to respond to "what if ... unique fact unique fact unique fact".
In a nutshell:
Independent reviewer? No requirement to disclose.
Part of a marketing program? Need to disclose.
Part of a book sales program? Disclose in posts.
Please note that this is my report to the best of my recollection. Nothing in this post is intended to be legal advice.
For some reason, I have trouble with my browser scrolling down the FTC homepage. Here is the information at its website About the Endorsement Guides.
GalleySmith's post about the FTC guides and the Kidlitcon session.
Charlotte's Library post. And WriterJenn.
Adding Colleen/ Chasing Ray's post asking, "but how do we know who to listen to."
Amazon Affiliate. If you click from here to Amazon and buy something, I receive a percentage of the purchase price.
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