I read an article the other day from the Washington Post entitled: FTC plans to monitor blogs for claims, payments which basically tells us that if you make money from your blog, you need to disclose it, otherwise you could be in some trouble with the Federal Trade Commission.
Basically, the Federal Trade Commission is trying to protect US consumers by introducing new legislation which will require all us United States bloggers to disclose when and how we make money on our blogs. So for example, if you place an affiliate link in your article or use Google AdSense, you need to tell your site visitors that if they click on those links, you make money.
This also goes for any kind of paid reviews or reviews done by you in exchange for gifts from a company.
My Take On The FTC’s Plan
For a few seconds I thought this could be a good thing. In my article How To Choose The Best WordPress Blog Hosting Company, I mention how I can’t stand these dumb “Top 10 Hosting Companies” review sites you see all over the Web. They in fact are not true review sites, they are just affiliate links designed to make the website owner money.
Sites like these get my blood boiling. Not even my coffee tastes the same when I come across sites like those. There’s no real value for the site visitor and I feel they are misled.
But then I quickly realized how the FTC really isn’t solving anything. My buddy Steve said it best in an email discussion we had about this:
One of the big problems here is that the FTC can’t do anything about a blog in Canada, for example. Just creating more government for very little to no gain, in my opinion. What will happen in the long run is that our government will put so many controls on the Internet, that server companies will start relocating to Mexico and bloggers (among others) will simply start hiding their identity…then, of course, only the honest people who don’t try to hide will be penalized for violating some silly government reg.
That about sums up my opinion on the subject.
What do you think? Do you think your government (wherever you live) should impose such regulations?
UPDATE: Here’s the actual FTC Proposal. Be warned, it was definitely written by a lawyer. 
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June 29th, 2009 at 5:34 am
Unfortunately for every disclosure required by the FTC there will be a hundred methods for continuing deceptive practices. The requirement itself could actually cause consumers more harm, giving them the impression that it is ok to let down their guard when reading information on-line. I personally think it is a wise decision for any writer to disclose financial relationships that might impact opinion, however, tools such as google words and advertising have obvious financial connections that it seems a bit silly to talk about. (Unless it is not obviously advertising as displayed.)
Fred H Schlegel´s last blog ..Buffalo Bill, Eiffel, Otis and The Keys To Success
June 29th, 2009 at 6:42 am
Well, I don’t believe that the Government should be involved at all. On the other hand, I do think that advertisements should be labeled as so..
June 29th, 2009 at 1:13 pm
Oh no, I’ve now got $96.00 sitting in my Google Adsense account, so when they cut that grand $100.00 check I’ll have to fork over a fortune in tax.
But always happy to help Uncle Sam.
Jannie Funster´s last blog ..Five Little Lightbulbs
June 29th, 2009 at 2:40 pm
Hi John,
I hadn’t heard this story, but when I did click on the link to read it, Firefox prevented a pop up window from opening, and then I found the Washington Post article sprinkled with ads. How ironic. Hmmm – Are they considered a blog or a website?
Since we already have the IRS involved anytime we make over $600 and get a 1099 showing our income from “another source”, this really doesn’t surprise me.
As bloggers we usually assume an ad on a site means the author will make a commission if we click/buy, but to the unsuspecting person, they don’t have a way of knowing. Other than paid reviews (which can be slanted, or the ones you’ve described), I don’t think it really matters. If a blog author or webmaster brings something to my attention and makes access to the site easy, via a link, more power to them. They should get something for their efforts. As for disclosing the (income)facts, I’d like to think a line or two in our disclaimer would do the trick. Hopefully we wouldn’t have to clutter up our blogs with “If you click on this link, I get paid” content. That could really “ugly up” our blogs. Plus, if we got too “disclaimered out” it could reduce our chances to make an income from blogging.
One thing the article did not discuss (or I missed it) are static ads and Google AdSense – ads we place on our sites but don’t write reviews about. Maybe that will come next as it sounds like the FTC will have their hands full trying to manager the hundreds of thousands of bloggers who are already writing positive (and maybe untrue) paid reviews.
This will be an interesting story to watch.
Barbara Swafford´s last blog ..How To Capitalize On Your Blog Statistics
June 29th, 2009 at 2:45 pm
Fred
Agreed. And you know, history shows us how getting too strict with dumb rules only causes black markets and even worse senarios.
Jim
I have to ask myself, does our government really have nothing better to do with their time and money? Are they going to pay dozens of “blog monitors” in our government to police this? Disclosures would be nice, though.
Jannie
Better watch out then, you don’t want the hammer coming down on that $96 fortune! hehe
June 29th, 2009 at 5:36 pm
Hi Barbara. I don’t know how they could police this. Like you said, there are thousands of blogs in the US. From what I understood, if you run AdSense on your blog, you’d need to disclose the fact that you make money when someone clicks on that ad.
I agree, it’s no big deal if we could simply add a “disclosure link”, but if we have to start disclosing every little detail everywhere there is an affiliate link, that could get ugly.
And yes, the Washington Post would have to disclose things on their site as well. They use and run AdSense.
June 30th, 2009 at 1:56 pm
Hi John – this seems ridiculous. If you put a note above your Adsense telling your customers you make money if they click your ads – surely you’d be violating Adsense TOS. But if you didn’t put a note there, you’d be breaking the law. It seems crazy.
June 30th, 2009 at 4:05 pm
Hi Cath. It sure does. At first I thought it might be a decent idea because like Barbara said, most bloggers understand how it works, but many regular Internet browsers don’t.
But then you really have to think about how much time and effort would go into this, not to mention money, and for what kind of results? Probably nothing much would change other than many Americans making less money.
July 1st, 2009 at 7:37 pm
I disclose everything on my site, voluntarily. It just feel like the right thing to do. People still click and buy. I don’t think they would have clicked more if I were hiding the affiliate links or the ads, but maybe I’m wrong.
Vered – MomGrind´s last blog ..Truth In Advertising
July 1st, 2009 at 8:13 pm
Hi Vered. That’s real cool that you disclose everything and would be an interesting test to find out what the difference might be if you didn’t disclose anything.
I bet you’re probably right. It wouldn’t matter much.
July 2nd, 2009 at 4:14 am
Hi John – Well, unfortunately – and not to get all political about this, but I just can’t help myself, as many who know me will attest – I think we’re going to see a lot more “regulatory oversight.” This is nothing more than an attempt to tap into another revenue stream. Let’s call it what it really is: taxation. And the government’s outrageous spending spree from the last six months in particular requires more revenue than we can imagine if there is a prayer of fiscal survival.
The beauty of this proposal, if an Orwellian concept is more beautiful than fearful, is that it is cloaked in the guise of consumer protectionism. Sort of like, “Warning: Coffee is hot!” This is one of those “No $hit, Sherlock” requirements government is so fond of.
The irony is, the FTC, if this proposal is enacted, will be spending more money monitoring and reporting on this issue to collect more money for the government, which will in turn evaluate the ROI vs. the revenue produced and allocate more funds to expand the program! The sound you are hearing is me beating my head against the wall.
Please, let’s not kid ourselves. While the FTC may sloganeer all it wishes to induce the thought that it’s in the consumer protection business, any regulatory agency offsets its operating expenses with revenue extracted via permissions, fines, and even garnishment or seizure. This money is as green as that which accompanies the tax forms we and our businesses currently send in.
Watch for the disclosure measure, if enacted, to spur changes in the tax code. Jannie will pay additional tax on her $96.00 because her gain was somewhat nefarious. The Internets are scary, after all! Or, our ability to make money will be impacted negatively. Look at what happened this week in North Carolina with Amazon Affiliates. Don’t think the FTC is going to stop with the individual blogger. Who has deeper pockets – you or Google?
The price we currently pay – having to put up with those sites you mentioned, or allowing tastelessness and general nastiness of content – to keep the freedoms we have on the Internet seems small by comparison with the vast slippery slope this measure will send us hurtling down.
Now, let’s also remember: the FTC is but one regulatory agency. With the vast number of presidential orders and congressional approvals – most of which are voted/enacted without our elected representatives even reading them in rush-rush hush-hush scenarios – occurring in this government on a daily basis, it’s a safe bet that there is lots of stuff like this we aren’t even aware of. Transparency, anyone? Internet national sales tax anyone? Use tax? The train is fixing to leave the station.
Betsy Wuebker´s last blog ..ADVENTURES IN CUSTOMER SERVICE: WELLS FARGO DUMPS ON A GRIEVING MOTHER
July 2nd, 2009 at 8:12 am
Hi Betsy. Thank you for taking the time to write out your thoughts – I appreciate it as I know your time is valuable.
You make some great points here. What is the government’s ROI? Who is going to man this program and police it? And like you said, many times things like this are just small little clauses or additions to a bigger bill congress wants to get passed.
The biggest problem I have with this proposal is the fact that no one else in the world has to abide by the FTC. Now if this was a huge problem which really scammed people out of money here in the US, maybe then I could see the government wanting to get involved; however, I don’t think it’s really that big of a deal.
July 3rd, 2009 at 8:15 pm
One pattern I’ve noticed with content is that it’s usually simpler and more effective to float cream to the top, than to try and police all the bad stuff.
When things are out in the open, in open systems, things like authority, trust, and integrity play key roles and the community/network help float good stuff to the top.
J.D. Meier´s last blog ..Lessons Learned from Bruce Lee
July 4th, 2009 at 7:22 am
I like that, J.D. Good stuff on blogs get spread around like wildfires thanks to social sites.