The Federal Trade Commission and Blogging/Social Media Regulations: Does Your Online Presence Cross the Line

As the advertising, marketing and branding world has embraced social media applications, the Federal Trade Commission has set a new set of rules, and has already begun work to monitor compliance.  In December, new rules setting a code of conduct for online “promotional” blogging took effect.

Under the new rules, any transaction of goods, services or payment between a company and an individual must be disclosed if it results in a promotional, “word of mouth” or otherwise related opinion.  These laws are intended to end the practice of wooing bloggers and other online attention grabbers with gifts or pay, then reaping the rewards of positive – and seemingly unbiased – support and words in the webisphere.

Already this year, the FTC has investigated apparel outfit Ann Taylor for holding a private event, complete with gifts, and inviting bloggers, many of whom raved about the new clothing line with – and without  – disclosure of these gifts.  While the FTC ultimately found Ann Taylor innocent of malfeasance, they have stated they are investigating several other cases, and that number will surely rise in the coming months.  The penalty for violating these rules can be tough; violations can result in the imposition of fines, injunctive relief and damages.

It is worth noting that these new rules also extend to celebrity endorsements, research facilities that have been beneficiaries of support from the endorsee, and anyone who espouses an experience which is clearly ‘extraordinary’ to the norm.  All of these situations also demand a disclosure of “material connections.”

To read more about the FTC rules, visit FTC.gov.