FTC Clarifies Blogger Fines for Non-Disclosure of Payments

WASHINGTON, D.C.—Boy, did this story ever get screwed up. It turns out that almost everyone who reported on the Federal Trade Commission’s revised guidelines for bloggers and other product endorsers misinterpreted the intent of the commission going forward, not to mention the amount of the fines that can be levied—and also who can levy them.

Not only is the potential fine for not disclosing that money is being exchanged for endorsements $16,000 per infraction, not $11,000, it turns out the FTC has no direct authority to levy fines in the first place.

“It doesn't matter whether it's $16,000 or $11,000. The root problem here is that reports that there is a monetary penalty for violating these guidelines [are] untrue,” FTC assistant director Richard Cleland told PRNewser. “The FTC does not have the authority to impose a fine for a violation to the FTC act. There is a provision that allows for a proceeding in federal court that allows for imposing of a monetary penalty for violation of trade regulation laws. The guidelines are not trade regulation laws.”

Cleland, who oversees the FTC’s division of advertising practices, also clarified that the FTC has not and would never fine a blogger or endorser but would (and has) gone after advertisers.

“We have never brought a case against a consumer endorser and we've never brought a case against somebody simply for failure to disclose a material connection," he said. "Where we have brought cases, there are other issues involved, not only failing to disclose a material connection but also making other misrepresentations about a product, a serious product like a health product or something like that. We have brought those cases but not against the consumer endorser—we have brought those cases against the advertiser that was behind it. If people think that the FTC is going to issue them a citation for $11,000 because they failed to disclose that they got a free box of Pampers, that's not true. That's not going to happen today, not ever.”

The real distinction, then, seems to be between the FTC’s definition of the civilian, or consumer, blogger and the professional blogger whose “material connection” is more or less hardwired. It sounds as if the FTC is keeping its options open.