When the FTC announced that bloggers had to disclose freebies or else, many bloggers were up in arms.
The key takeaway for bloggers was that they could be fined $11,000, while their more mainstream counterparts wouldn’t have to worry about it.
The assistant director at the FTC overseeing this ruling, Richard Cleland, says that’s not true.
That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?
What Cleland doesn’t answer is why it’s applying to bloggers, and not newspapers or other forms of reporting. He vaguely replies:
It’s not the medium, it’s the message. We want to establish a self-imposed ethical standard so people are aware of the conflicts of interest. That’s the base, and we’re saying: This is commerce. That’s acceptable, but when that happens, the reader should know that there’s this potential bias.
In another interview with Edward Champion, Cleland tries to more explicitly explain the difference between a newspaper critic and a blogger, and why there are different standards:
Cleland said that a disclosure was necessary when it came to an individual blogger, particularly one who is laboring for free. A paid reviewer was in the clear because money was transferred from an institution to the reviewer, and the reviewer was obligated to dispense with the product. I wondered if Cleland was aware of how many paid reviewers held onto their swag.
“I expect that when I read my local newspaper, I may expect that the reviewer got paid,” said Cleland. “His job is to be paid to do reviews. Your economic model is the advertising on the side.”
From Cleland’s standpoint, because the reviewer is an individual, the product becomes “compensation.”
“If there’s an expectation that you’re going to write a positive review,” said Cleland, “then there should be a disclosure.”
But why shouldn’t a newspaper have to disclose about the many free books that it receives? According to Cleland, it was because a newspaper, as an institution, retains the ownership of a book. The newspaper then decides to assign the book to somebody on staff and therefore maintains the “ownership” of the book until the reviewer dispenses with it.
As for enforcing the law, Cleland tells Fast Company, he has his work cut out for him, but he says “Competitors are very quick to turn people in. I’ve never suffered from a shortage of competitive complaints.”