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The Stupid, Stupid FTC Guidelines

This is not self-publishing related…or maybe it is.  Because it’s a case of the government meddling in the affairs of new media and getting it entirely wrong.  Yesterday, the FTC revealed guidelines about how bloggers need to reveal how they’re paid for content. On the surface this makes sense because a product review blogger should reveal if he’s being paid by the manufacturer to write a review.  The problem with the FTC guidelines is this applies to all types of reviewers, including book bloggers, not just unscrupulous make-money-online types.

From the Edrants interview with the FTC’s Richard Cleland:

In the case of books, Cleland saw no problem with a blogger receiving a book, provided there wasn’t a linked advertisement to buy the book and that the blogger did not keep the book after he had finished reviewing it. Keeping the book would, from Cleland’s standpoint, count as “compensation” and require a disclosure.

It’s so incredibly stupid, it makes me sad.  But it’s also so incredibly stupid that the policy can’t stand.  Amazon will likely be upset that blogs all over the web will start taking down affiliate links.  It’s a law written by someone who has absolutely no idea how the web works.  Affiliate marketing is one of the business models of the web.  Yes, it’s different than paid ad space, but that’s because the web is a different animal.

Yet it’s not so different that websites should be treated by such a different standard. The FTC guidelines were designed to make bloggers accountable like traditional print outlets, but it’s making bloggers out to be a totally different entity.  As if there’s an inherent difference in a writer or publicist sending out a book to a newspaper or to a blog.  There’s no difference.  The blogger hasn’t suddenly been bribed to write a review just because they’ve been sent a book.

So: someone happens to click on an affiliate link and buys a book.  How is this a kickback to the reviewer?  It’s a totally arbitrary process that may or may not happen.  It’s nowhere near the same thing as direct payment.

Also within these guidelines is the fact that the FTC trusts a paid review structure more than unpaid (i.e. old media more than new media).  By the FTC’s logic, if money is changing hands, this negates the conflict of interest of sending out a book, so long as the reviewer is being paid by someone other than the manufacturer.  Again, new media requires a new model.  Payment from an editor does not make a writer more legitimate.

Cleland insisted that when a publisher sends a book to a blogger, there is the expectation of a good review. I informed him that this was not always the case and observed that some bloggers often receive 20 to 50 books a week. In such cases, the publisher hopes for a review, good or bad. Cleland didn’t see it that way.

“If a blogger received enough books,” said Cleland, “he could open up a used bookstore.”

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.”

Yes, the economic model is different, but the web is different than print. So a lit blogger can sell used books at a bookstore – really, so what?  Once a book has been sent to me, that’s ownership, I should be able to do with it as I please. There is no implication of writing a good review when a book/CD/mp3 is sent to a blog reviewer.  I mean, really?  All review sites are set up with the purpose of writing good reviews?  It’s absurd.

The irony is these guidelines are going to screw up traditional media.com’s who are already struggling with ways to bring in revenue.  These guidelines make it that much harder.  On the bright side, “Cleland did concede that the FTC was still in the process of working out the kinks as it began to implement the guidelines.” Maybe the entire plan is a kink.

It’s kind of tragic that the FTC could be this wrongheaded, which will totally transform how blogging works.  Yes, there are unscrupulous marketers who write glowing reviews of products for payment.  But this has nothing to do with a great many review sites and how they operate.  It’s like arresting a j-walker for theft.  Actually, scratch that: not disclosing that book was sent to you or putting up an affiliate link isn’t even j-walking – it’s walking on the sidewalk.

  • Frank Daniels

    Agree agree agree agree agree….though I would add a third and possibly a fourth ‘stupid’ to the title of this blog post.

  • http://podpeep.blogspot.com Cheryl Anne Gardner

    Yup. Every day I am more astounded by the stupidy in this world.

    We just put up our stupid, stupid, stupid, stupid disclosure statement on the peeps site.

    I can see what’s next, I guess this means when I go volunteer to clean up trash for earth day and get a t-shirt to wear for the day, i’ll have to disclose that and pay taxes on it’s value as well.

  • http://www.selfpublishingreview.com Henry Baum
  • http://podpeep.blogspot.com Cheryl Anne Gardner

    I am about 75 pages into the 81 of the document, most of it doesn’t apply to us as far as our “product” focus goes. And actually, the consumer protection part of it is definately warranted, specifically when it comes to food products, medical products, things of that nature etc. But because the guidelines have to be broad so they are not 10 thousand pages of exceptions, all consumer products must be included. And so they decided that the guidelines shouldn’t focus on products they should actually focus on “endorsements.”

    There is a dilineation made between traditional media and “new” media that being the independent editorial function traditional media has always had. It’s method of obtaining products and disseminating them for review for some reason isn’t called into question.

    For the purposes of book reviews, which as far as consumer products go, pose no health or safety risk other than ratings and the contextual risk to say minors or something, the book reviewer would be considered the endorser and the publisher, or self-published author, would be considered the “advertiser.” According to example 7, a disclosure of a free book would be unnecessary as the endorsers relationship to the advertiser is inherently obvious. Other forms of payment between Advertiser and Endorser would need to be disclosed, like review fees, because authors paying for reviews directly to book reviewers is not the traditionally and inherently known model and does affect perception and credibility.

    The gist of the whole thing is: Endorsements (Book reviews in this case) must reflect the honest opinions, findings, beliefs, or experiences of the endorser (the reviewer). Furthermore, and endorsement may not convey any express or implied representation that would be deceptive if directly made by the advertiser (self-published author). The only time I can see this being an issue is if the book review is glowing and the author paid for it. Or if the author would be reluctant to admit publically that the review was paid for.

    As far as material connections disclosure: When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not
    reasonably expected by the audience), such connection must be fully disclosed.

    I did find a nice little bit in there that does protect the Endorser should the advertiser take excerpts from the endorsement and use them out of context in a misleading way to increase sales.

    So, what I am getting from all of this is not really as miserable as it seems, at least not for book reviewers.

    255.1 General considerations.
    (a) Endorsements must reflect the honest opinions, findings, beliefs, or experience of the
    endorser. Furthermore, an endorsement may not convey any express or implied representation
    that would be deceptive if made directly by the advertiser. [See §§ 255.2(a) and (b) regarding
    substantiation of representations conveyed by consumer endorsements.

    § 255.5 Disclosure of material connections.
    When there exists a connection between the endorser and the seller of the advertised product that
    might materially affect the weight or credibility of the endorsement (i.e., the connection is not
    reasonably expected by the audience), such connection must be fully disclosed.

    In reality, for us, this really isn’t that big a deal or even a deal at all. Nothing a policy disclosure posted on your site won’t immediately fix. If Sony calls you up and offers your reviewers free e-readers to get you reviewing more e-books, just disclose it. No biggie.

    For what we do: book reviews, this is really just nuisance, but for products that could cause harm or even kill people, I would want to know if the product reviewer received compensation in some way for the review. Wouldn’t you?

    I’ll send you my markup if you want to read the highlights Henry.

    Emily posted the disclosure I had drawn up at the bottom of the peeps site for reference. I don’t think we need to worry about any more than that. But I ain’t giving legal advice here. Just giving my interpretation of what I read.

  • http://www.selfpublishingreview.com Henry Baum

    Well, if this is the case then the representative from the FTC has no idea what he’s talking about. But this:

    The only time I can see this being an issue is if the book review is glowing and the author paid for it. Or if the author would be reluctant to admit publically that the review was paid for.

    … would suggest a climate where bloggers would be influenced to be harsher on a book so as to not reveal a conflict of interest. I’ve never bought into the fact that paid reviews=biased reviews. What if you love something that was paid for by the author? It’s certainly possible. So this law has the potential to sculpt content because bloggers could be looking over their shoulder.

  • http://podpeep.blogspot.com Cheryl Anne Gardner

    Exactly, I do believe that Dear Author said something to that effect in their post about it. They felt too that it might make reviewers want to lean more towards snarky mean reviews. I could see that happening with maybe some review sites, but most of the good sites disclose anyway, so it really won’t make much of a difference in the long run.

    If I get a free book, not a virtual book, i’ll say so … won’t change my review at all even if I don’t get many Live books to review. I have reviewed highly just as many or more virtual books than I have live ones.

    After today, I’m done with this. Disclosure is up, and I am moving on.

    The FTC guy was just defending the position, he just happened to be interviewed by a book person, could have been a chicken farmer or whatever, his response would have been the same, I imagine. He can’t make exceptions either based on the product. So his response was stock.

  • http://www.jmreep.com/juvenilia J.M. Reep


    I really doubt the FTC will be enforcing this law against small, one-person book review blogs. Somewhat larger sites like SPR, however . . .

    And if there is a massive, draconian crackdown, maybe it will have the positive effect of encouraging reviewers to accept ebook versions of books. After the reviewer has reviewed it, or chosen not to review it, he or she can just delete the file. I’ve always thought that sending physical copies of books to reviewers is a wasteful practice anyway.

  • http://podpeep.blogspot.com Cheryl Anne Gardner

    Agreed JM. That’s why for most small blogs, they can just put up a disclaimer as to whether or not they receive compensation and be done with it, like the podpeople did yesterday. The whole point of the excersise is to allow consumers to make an informed decision as to whether they want to consider an endorsement credible or not. Many consumers find paid endorsements to be suspect. And if an endorser was compensated in any way, the consumer needs to know that. I know I would want to know.

    I think it’s wasteful as well, but I still get authors wanting to send me hard copies. I just use them for the giveaways in that case. But with e-books on the rise, some authors don’t sell physical copies at all, so there isn’t one to send anyway.

  • http://www.swanrange.com Carol Buchanan

    I Tweeted this article’s link. Don’t you just love big government?

  • http://www.selfpublishingreview.com Henry Baum

    This isn’t “big government,” it’s dumb government. Nothing wrong with regulations if the regulations make sense (I promised myself I wouldn’t get political here).

  • http://www.marinbookworksblog.com Joel Friedlander

    Cheryl Anne:
    >But with e-books on the rise, some authors don’t sell physical copies at all, so there isn’t one to send anyway.

    Which, of course, really leads to the question of whether, receiving an ebook, you have actually gotten “something of value” at all.

    The habit in the blogosphere of treating reviews as just another money-making or affiliate-sales-building activity really turns a lot of people off, and I think no one is more sensitive to this than book reviewers. The (unfortunate?) fact is that in the realm of self-published books, this is basically a moot point, since review or no, most will have almost no sales in any event.