Bloggers Beware: FTC Fines for Improper Product Endorsements

Bloggers Beware: FTC Fines for Improper Product Endorsements

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Tim Manni of the excellent HSH Associates Financial News Blog reports about a new FTC regulation:

The Federal Trade Commission (FTC) released a new set of guidelines today that deal with online advertising and endorsements. As a true sign of the times, today’s announcement addresses bloggers  in particular. Fines could be as high as $11,000 for bloggers who do not properly disclose “material connections” to advertisers:

“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,” the FTC said in a statement. “Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.: 

“The case of “a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board” does not represent a commercial endorsement in the eyes of the FTC.

However, a blogger paid to post about advertiser’s product is covered by the rules, whether payment comes directly from the marketer or from a third-party acting on behalf of the marketer.

 Read the entire FTC Release.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

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  1. TTLB:

    Thanks for the mention and the link — much appreciated!

    Tom Claburn said it best: “Whether the FTC will be able to effectively police millions of online posts and comments remains to be seen.” Policing the internet is not an easy task.

    My guess is that they will focus their efforts on big-time blogs and celebrity endorsements.

    I’ll definitely be checking back with you guys soon!

    Thanks again,

  2. Thanks for the mention and the link — much appreciated!