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FTC New Rule: Bloggers Must Disclose Compensation

By October 5, 2009October 7th, 2009Internet Lawyer

endorsement-reviewIf there’s compensation for reviews or testimonials (including money or free products), such payment must be disclosed under new Federal Trade Commission (FTC) guidelines. Equally important,

“advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.”

Note that the FTC can hold both the endorser and the advertiser liable for false claims, unsubstantiated claims, or failing to disclose the compensation.

This is long overdue from a consumer protection standpoint. Those who use flogs, phony review websites, and cooked up testimonials are on notice that the FTC will not tolerate this nonsense in the future. It will also set the bar higher for affiliate status disclosures.

Unfortunately, it will take some expensive lawsuits and a few info product marketers going to jail before the new reality sets in. The federal government is taming the Internet Wild West. Cyber-Deadwood is becoming civilized whether it wants to or not.

Recommended Reading: FTC Publishes Final Guides Governing Endorsements, Testimonials

Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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