Blogger Rewards and the U.S. Government

The U.S. government's Federal Trade Commission has turned its attentions to bloggers who review or endorse products and services; also of interest are the ads that appear on some blogs; Google's Adsense is one wildly program that attempts to display ads relevant to your postings -- and you get (a very little) commission if a visitor initiates and completes a purchase starting from your blog.

The FTC apparently thinks there's a danger some readers won't realize the commercial relationship between you, the blogger, and your reader. I guess the folks at FTC think all bloggers are (1.) wealthy enough they don't even want to make money from their blogs and (2.) an alarming number of blog visitors might be fooled.

Before I go on, here are the URL's to the story that first alerted me to the new rules, which take effect this coming December 1st, and to the FTC announcement on its website:

FTC Takes on Pay-per-Post

FTC Press Release

Some of the concerns of the FTC do make sense. For instance, here's one point from their press release:

[A]dvertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

There's also a concern that a blogger and an advertiser may have a commercial relationship of some type that a reader "would not expect," in the words of the press release.

Those of you who aren't based in the U.S. and maybe don't write about U.S.-related subjects anyway may snort and think you're free of worry.

Well, maybe not; read on.

Disclaimer: I'm NOT an attorney nor in any way at all formally qualified to interpret laws in any jurisdiction. Therefore, I assume no responsibility for your interaction with the laws of any and all jurisdictions. (This sort of "Keep-me-out-of-trouble" statement is absolutely essential these days.)

I'm not sure how this might work, but let's say you stay in a property owned by the Hotel XXX international chain on your holiday to Bali. And let's say Hotel XXX has one or more properties in the U.S. And let's further say the chain's website allows booking into any of its properties anywhere in the world by anyone located anywhere who has computer and Internet access -- and that person books a stay in the U.S. outpost.

If I'm understanding this development properly, should the above scenario happen *and* you get any sort of material reward for it -- a commission, goods-in-kind, and so on, then you must explicitly disclose you will accrue said benefit should your visitor click on through and (in this example) book a room.

Irksome to have to disclaim here, disclaim there, disclaim, disclaim, disclaim everywhere, isn't it?

There's another aspect that occurred to me that the story and press release don't mention: U.S. taxes. You can be 100% certain that should you receive any material reward for carrying an advertisement, endorsing a product or service in your blog, or both, and that reward comes from anyone or any company based on U.S. soil, then the friendly folks at the U.S. Internal Revenue Service will want to know about that. And they may want a piece of your pie. Or they may not; perhaps there are minimum amounts you must surpass before being liable for any tax. Again, I'm not a lawyer so don't know. Heck, even if I *were* a qualified tax attorney, I'd be unsure, most likely, as even top experts squabble about the meaning of the tax code all the time.

Predictably, and, in my view, quite understandably, just about All Bloggers Great and Small are objecting to this, seeing it as an infringement on free speech. (Apologies to the late but still wonderful author James Herriot for appropriating his books' titles.)

There's another potential point of trouble I thought about. Let's say I find some great ethnic restaurant in Podunk, Texas and write a rave review. But I didn't identify myself to anyone in the restaurant. However, the owner runs across my review then on my next visit happens to recognize me, and gives me some portion or perhaps all my meal free, as a token of gratitude for the review.

Do I need to yank out a Blackberry and post that right away, or at least rush to the nearest computer I can access and do so? Or does the legal principle of "ex post facto" apply? That principle holds that a person who does something that's perfectly legal today then next week the government passes a new law making that action illegal henceforth, the person who did it a week ago can't be dragged into court over it -- the law is ex post facto, or "after the fact." Or that's how my untrained mind grasps the concept, anyway.

My brain hurts; this stuff is downright tiresome, wearying.

Long-time readers of mine know I do go a considerable extra mile to clarify my relationships with the subjects of anything I write, if that's somehow worth mentioning. Just last week in a column I do at another URL I had two or three stories in which I decided to point out I wasn't getting one darned thing for writing what I wrote. On the other hand, if I do get some benefit for a piece I write -- even if that benefit isn't even offered until "ex post facto," I mention *that.*

Further, a number of times I've been asked to visit and review some place, mostly restaurants and bars, in exchange for free food, drinks, or both. But my personal rule is to decline the offer. I may well visit then write about the place -- but I won't accept whatever was offered, insisting on paying my bill. Why? Because I don't want to feel beholden. The owner or manager will feel cheated if I get something free then write anything negative. But if there are negatives, I intend to mention them (within the limits of various libel laws, that is, regarding which I err well this side of caution.)

Fact is, a great many bloggers won't ever be bothered by this, since they often make little or no money or any other reward. And that's likely true of bloggers based on U.S. soil who write exclusively about U.S. stuff.

BUT -- but -- these new rules do cast a pall on the blogosphere, and they do open the door a crack further. And that's always worth watching.

Monday, November 9, 2009