FTC sets rules on blogger disclosure

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TEXT OF STORY

Bob Moon: How much do you rely on the opinions of others to decide which products to buy, or which restaurants to try, or which movies to see? Most newspapers have ethical guidelines, so you can be pretty sure a reviewer or their bosses paid for the meal and that they tried their best to be treated as any other diner. But read a review online -- for food, or anything else -- and it's not always clear if there might be a hidden conflict of interest. Do bloggers get paid to say what they say? Did a company send the blogger a free sample in the hopes of a good review? Marketplace's Alisa Roth reports the Federal Trade Commission issued new guidelines today.


ALISA ROTH: Erika Valente reviews beauty products on her blog, Makeup Bag.net. Sometimes she buys the products. And sometimes, the company sends her samples.

ERIKA VALENTE: Let's see, like maybe new fall nail polishes, maybe a face mask, a body wash.

Sometimes her reviews are good. Some of them are pretty ugly. But she doesn't always say where the product comes from. The new FTC guidelines say she'll have to.

Tom Cohn is an attorney at the law firm Venable. He used to work at the FTC.

He says the FTC sees bloggers as endorsers. So the new rules say reviewers have to make it clear what their relationships with the company is.

TOM COHN: For disclosing that material connection, you know, if the blogger is being paid or is being given a free item, that's sort of a direct relationship between the advertiser and the endorser. And the blogger should, in those situations, yeah, he should disclose that he got the item for free or he was paid in exchange for giving his review.

Both bloggers and companies can get into trouble if they don't follow the rules. The FTC won't be able to keep track of every single blog. In fact it says for the most part, it probably won't go after individual reviewers.

But another lawyer, Linda Goldstein, says the new rules will change the ways companies use bloggers and other social media.

LINDA GOLDSTEIN: The impact will be equally significant on the brands themselves who may now have to re-evaluate some of the ways in which they engage that community and use viral marketing as part of their marketing campaign.

Erika Valente says it won't change her blog much. She wrote the blog for more than a year before beauty companies started sending her free stuff.

In New York, I'm Alisa Roth for Marketplace.

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