Interview with the FTC’s Richard Cleland

This morning, the Federal Trade Commission announced that its Guides Concerning the Use of Endorsements and Testimonials would be revised in relation to bloggers. The new guidelines (PDF) specified that bloggers making any representation of a product must disclose the material connections they (the presumed endorsers) share with the advertisers. What this means is that, under the new guidelines, a blogger’s positive review of a product may qualify as an “endorsement” and that keeping a product after a review may qualify as “compensation.”

These guidelines, which will be effective as of December 1, 2009, require all bloggers to disclose any tangible connections. But as someone who reviews books for both print and online, I was struck by the inherent double standard. And I wasn’t the only one. As Michael Cader remarked in this morning’s Publishers Marketplace:

The main point of essence for book publishers (and book bloggers) is the determination that “bloggers may be subject to different disclosure requirements than reviewers in traditional media.” They state that “if a blogger’s statement on his personal blog or elsewhere (e.g., the site of an online retailer of electronic products) qualifies as an ‘endorsement,'” due to either a relationship with the “advertiser” or the receipt of free merchandise in the seeking of a review, that connection must be disclosed.

ftcIn an attempt to better understand the what and the why of the FTC’s position, I contacted Richard Cleland of the Bureau of Consumer Protection by telephone, who was kind enough to devote thirty minutes of his time in a civil but heated conversation. (At one point, when I tried to get him to explicate further on the double standard, he declared, “You’re obviously astute enough to understand what I mean.”)

Cleland informed me that the FTC’s main criteria is the degree of relationship between the advertiser and the blogger.

“The primary situation is where there’s a link to the sponsoring seller and the blogger,” said Cleland. And if a blogger repeatedly reviewed similar products (say, books or smartphones), then the FTC would raise an eyebrow if the blogger either held onto the product or there was any link to an advertisement.

What was the best way to dispense with products (including books)?

“You can return it,” said Cleland. “You review it and return it. I’m not sure that type of situation would be compensation.”

If, however, you held onto the unit, then Cleland insisted that it could serve as “compensation.” You could after all sell the product on the streets.

But what about a situation like a film blogger going to a press screening? Or a theater blogger seeing a preview? After all, the blogger doesn’t actually hold onto a material good.

“The movie is not retainable,” answered Cleland. “Obviously it’s of some value. But I guess that my only answer is the extent that it is viewed as compensation as an individual who got to see a movie.”

But what’s the difference between an individual employed at a newspaper assigned to cover a beat and an individual blogger covering a beat of her own volition?

“We are distinguishing between who receives the compensation and who does the review,” said Cleland. “In the case where the newspaper receives the book and it allows the reviewer to review it, it’s still the property of the newspaper. Most of the newspapers have very strict rules about that and on what happens to those products.”

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.

But couldn’t the same thing be said of a newspaper critic?

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.”

From Cleland’s standpoint, because the reviewer is an individual, the product becomes “compensation.”

“If there’s an expectation that you’re going to write a positive review,” said Cleland, “then there should be a disclosure.”

But why shouldn’t a newspaper have to disclose about the many free books that it receives? According to Cleland, it was because a newspaper, as an institution, retains the ownership of a book. The newspaper then decides to assign the book to somebody on staff and therefore maintains the “ownership” of the book until the reviewer dispenses with it.

I presented many hypothetical scenarios in an effort to determine where Cleland stood. He didn’t see any particular problem with a book review appearing on a blog, but only if there wasn’t a corresponding Amazon Affiliates link or an advertisement for the book.

In cases where a publisher is advertising one book and the blogger is reviewing another book by the same publisher, Cleland replied, “I don’t know. I would reserve judgment on that. My initial reaction to it is that it doesn’t seem like a relationship.”

Wasn’t there a significant difference between a publisher sending a book for review and a publisher sending a book with a $50 check attached to it? Not according to Cleland. A book falls under “compensation” if it comes associated with an Amazon link or there is an advertisement for the book, or if the reviewer holds onto the book.

“You simply don’t agree, which is your right,” responded Cleland.

Disagreement was one thing. But if I failed to disclose, would I be fined by the FTC? Not exactly.

Cleland did concede that the FTC was still in the process of working out the kinks as it began to implement the guidelines.

“These are very complex situations that are going to have to looked at on a case-by-case basis to determine whether or not there is a sufficient nexus, a sufficient compensation between the seller and the blogger, and so what we have done is to provide some guidance in this area. And some examples in this area where there’s an endorsement.”

Cleland elaborated: “I think that as we get more specific examples, ultimately we hope to put out some business guidance on specific examples. From an enforcement standpoint, there are hundreds of thousands of bloggers. Our goal is to the extent that we can educate on these issues. Looking at individual bloggers is not going to be an effective enforcement model.”

Cleland indicated that he would be looking primarily at the advertisers to determine how the relationships exist.

[UPDATE: One unanswered concern that has emerged in the reactions to this interview is the degree of disclosure that the FTC would require with these guidelines. Would the FTC be happy with a blanket policy or would it require a separate disclosure for each individual post? I must stress again that Cleland informed me that enforcement wouldn’t make sense if individual bloggers were targeted. The FTC intends to direct its energies to advertisers. Nevertheless, I’ve emailed Cleland to determine precisely where he stands on disclosure. And when I hear back from him, I will update this post accordingly.]

[UPDATE 2: Cleland hasn’t returned my email. But his response in this article in relation to Twitter (“There are ways to abbreviate a disclosure that fit within 140 characters”) suggest that bloggers will be required to disclose per post/tweet.]

[UPDATE 3: A commenter has suggested: Why not return or forward all the review copies that you receive directly to Mr. Cleland?]

[UPDATE 4: In an October 8, 2009 interview with Fast Company, Cleland has backpedaled somewhat, claiming that the $11,000 fine is not true and indicating that the FTC will be “focusing on the advertisers.” The problem is that page 61 of the proposed guidelines clearly states, “Endorsers also may be liable for statements made in the course of their endorsements.” And endorsers, as we have established in this interview, include bloggers. However, Cleland is right to point out that the guidelines do not point to a specific liability figure and that it would take a blogger openly defying a Cease & Desist Order to enact penalties. The Associated Press was the first to report the $11,000 fine per violation. Did somebody at the AP misreport the penalty information? Or was it misinterpreted?

Some investigation into FTC precedents would suggest that the AP reported these concerns correctly. Here are some precedents for the up to $11,000 fine per violation: non-compliance of wedding gown label disclosure, non-compliance of contact lens sellers, and an update to the federal register. On Monday, the FTC precedents establish heavy penalties for non-compliance, the the guidelines themselves specify penalties as endorsers, and Cleland insists that bloggers who review products are “endorsers.” On Wednesday, Cleland now claims that bloggers won’t be hit by penalties. The FTC needs to be extremely specific about this on paper, if it expects to allay these concerns. (Thanks to Sarah Weinman for reporting assistance on this update.)]

© 2009, Edward Champion. All rights reserved.

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177 Comments

  1. Wow. The holes in Cleland’s understanding of both blogging and reviewing are glaring. This is even worse than I thought.

    What’s also jarring is that it sounds like they are going to try to choke off the “advertisers.” Will publishers be told, in effect, no more review copies for bloggers?

  2. My friend who worked at the Wall Street Journal used to make monthly trips to the used bookstore with a filled with books he’d received from publishers. The money he received from book sales funded many a dinner out.

  3. “The newspaper then decides to assign the book to somebody on staff and therefore maintains the “ownership” of the book until the reviewer dispenses with it.”

    That is patently false, in my experience with four newspapers. The reviewer gets the book and keeps the book. It is no different from bloggers.

  4. What if you give a negative review for a product? Does that mean since I haven’t given an endorsement then I don’t have to disclose where I got the book from?

    What about newspapers and review magazine publications who get a ton of ARCS from publishers? Do the same rule apply to them?

  5. So, is a line in a post saying where you got the review copy enough? And does Amazon Affiliates or other thing require an additional statement?

    I think this shows an appalling lack of understanding about blogging & book reviewing & payments, but bottom line, what does this mean?

    The returning the book bit boggles the mind.

  6. Clearly this GOVT official has no clue as to the real workings of a blogger or a book author/publisher.

    And, I noticed that he only spoke of “positive” reviews. There is no guarantee from any book reviewer/blogger that a book will get a positive review. There is no guarantee that it will actually receive any review (least of all in a timely manner).

    The double-standards in this FTC secanario that is aimed at “new media” is offensive and aggressive. Either make the standard the same or do not bother to implement something that tips the scale.

    I would like for these bureaucrats to actually go through the process of getting a reviewer on both the print media and the new media and see how it works. Tell me where that book ends up. Tell me that there is a guarantee that the book will be read and reviewed and that it will be a positive review.

    Until the FTC can prove their misaligned ideals then they do not have a leg to stand on and they need to backdown on the uneven scales of justice.

  7. Well, that was clear as mud. I guess I’ll keep doing what I’m doing now until someone knocks on my door and tells me otherwise.

  8. So are they saying no affiliate links? Or just that if there is an affiliate link or you keep the book you have to disclose? Does that mean I have to write if I purchased the book myself or got it from the library if I’m going to have an affiliate link up? Maybe they should have thought this through a little more before making the ruling…

  9. It strikes me that poor Cleland might secretly have his own book blog. Perhaps he’s jealous of those bloggers that receive books for review… otherwise none of this makes any sense. What is clear is that this is yet another government agency intent on looking busy by doing nothing.

  10. “Cleland insisted that when a publisher sends a book to a blogger, there is the expectation of a good review.” Sure they may hope to have a good review but bloggers know that they are in no way obligated to give them one. And giving books back? Affiliate links? There’s a lot in there!

    This double standard is just appalling. Thanks for the interview Ed.

  11. Wait – publishers are sending me books because they’re looking for a review? I wish someone had told me.

    And here I thought it was just because I’m a likable guy.

  12. And what about a publication like Booklist (who I review for). I am compensated but also keep the book – and often if the publisher sends my editor a final copy of the book it is forwarded to me as well. (So I receive a small check, an ARC and maybe a hardcover.) Am I supposed to return it all to Booklist or to the publisher?

    This whole discussion is very Wonderland as the bottom line is that there are too many blogs to police, plain and simple. Of course that means that only a few would be hit – enough to strike the fear into everyone else I suppose.

    We are going to have to marshal a response to senators and congressmen/women at some point. A blanket response that tells them this does not work – and that a whole freaking lot of us are not happy.

  13. What if there is an auto-generated (Google AdWords, et al) ad on your page? Is Google creating a Payola relationship unbeknownst to the blogger?

  14. The “you could send the book back” argument gets even more problematic when dealing with review copies that are sent digitally.

    I’m thinking mainly of music here, but I suspect this could become more common for review copies of books over the next few years. Which is a whole other issue, admittedly…

  15. I have to be honest, if they start running with this then I have no interest in reviewing for Booklist or anywhere else where I actually do get paid. If part of that payment includes me having to return the book to my editor then it is not worth my time. And I’m sure I wouldn’t be the only one. Who’s going to want to review anywhere with this kind of threat?

  16. what’s the FTC’s statutory authority for instituting this regulation? This looks like a free press issue to me and i worry about a slippery slope about other issues beyond “product endorsements” by bloggers. Would a political activist have to disclose if they received campaign materials from a campaign they were endorsing like t-shirts or bumperstickers that could be considered compensation? Will individual bloggers have to start applying an “equal time” rule like the networks used to have for political campaigns? What are the rules for professionals who are salaried employees of an organization who in their private time endorse, promote and defend the activities of that organization on a website? What about anonymous political speech about issues affecting commerce?

    This whole thing strikes me as something that somebody didn’t think through before it got out of the building.

  17. Also what about non-american bloggers? What about blogs hosted offshore and funded by non-american persons?

    Doesn’t the FTC think they should get a handle on all the fucking spam I get all the time before they start annoying bloggers and book publishers about free review copies?

  18. So hang on a moment… if I’m ‘compensated’ with a product, and choose to keep it, am I supposed to declare it on my income papers, and then get taxed on it accordingly?

    Further, this particularly sucks for the companies themselves because any product reviewed would have to be considered ‘refurbished’ if they’re sent back.

    And if anyone could answer my first question, I’d really appreciate it… I need an answer. salem (at) technoheads (dot) org is my email…. cheers.

  19. the more i think about this the stupider it seems. Reading the rules, it appears that they want to call reviews where reviewers receive free review copies “sponsored” when it happens on a blog, but not when it happens in a magazine? I can state for a fact that I have received review copies as my only “compensation” for reviewing books in dead tree editions of things, and I know I’m not the only person in such a situation who is not an “employee” of traditional media.

    What’s particularly frustrating is it’s clear from the discussion in the PDF you linked is that all of these objections were clearly made by the commenters the FTC solicited about the proposed guidelines, and they obviously just ignored them.

    I see lawsuits in this rule change. Someone like you, Ed, who makes his living at this stuff I suggest you start talking to folks at the EFF and ACLU well before the rules kick in on December 1st.

  20. Disclaimer: I haven’t read the regulations in their entirety, but I have followed their development and am familiar with the rationale behind them. It has nothing to do with choking the new media and everything to do with ensuring consumers are provided with knowledge they should have when making a decision to purchase.

    That said, books and other merchandise sent to established trade journals and newspapers are not sent to the individuals who end up reviewing them. As was noted by the reviewer from Booklist, the copy of the book may be given to the individual along with whatever other payment they received as part of their remuneration for the review. In some cases, it may be ALL their remuneration.

    That IS, in fact, different from the individual receiving that same book or merchandise directly, like it or not. The reason is not, as Mr. Cleland rather foolishly stated, that when an item is sent to said individual the sender is assuming the review will be positive. It is that there is no implied assurance that the individual, unlike what he refers to as “an institution,” will not be influenced by the fact they received the item without cost.

    Newspapers, magazines and other established publications have a tradition of being unbiased, and of guarding that status with sometimes draconian rules. That they may choose not to adhere to those rules is beside the point. What IS the point is that there is no such tradition or expectation with regard to blogging, where anyone can set up and start giving their opinion.

    There were and are bloggers who receive thousands of dollars’-worth of merchandise to review. The only qualifications some of them have are that their blog is hugely popular. Their readers have no way of knowing, if Mr. Blogalot chooses not to reveal the information, that the Amazing Electronic Whadzit they just raved about, was a “gift” from the Amazing Electronic Whatzit Corp.

    In fact, some of those bloggers were collecting fees as well as merchandise for their reviews. From the manufacturers.

    Book bloggers are no more singled out than bloggers of any other description, other than that it was felt the regulations needed to be clear books were included. Like it or not, under the law, a book is just as much a product as the Amazing Electronic Whadzit.

    The problem is that there needs to be some way for consumers to be made aware when someone passing judgment on a product, good or bad, has received some kind of compensation for that product–including the product itself. A tech reporter at a newspaper who gets a new Dell laptop to review is going to have to send it back to Dell when he/she is done. The cost of return isn’t sufficient to make a difference to Dell.

    However, to require someone to send back a book when they’ve finished it is counterproductive. Not only can that copy not be sold, the cost of dealing with getting all those copies back would be prohibitive. The value of the product itself is too low.

    Even disregarding a link to Amazon or whatever, a book has an established value–its cover price. Advance review copies don’t have cover prices, but they are considered collector’s items by those who collect them. Intrinsic value counts, too.

    So, to say that a free copy of a book doesn’t qualify as compensation seems a little ingenuous, especially given the value most of us give our libraries. I will also note that review copies of books are almost always first editions from the first print run. Ask a book collector what that’s worth.

    It’s entirely possible the regulations need some fine-tuning. Most do. However, attributing all sorts of nefarious intentions to them does no one any service. As reviewers, we all have a responsibility to those who listen to our advice. Part of that responsibility is advising them when we didn’t pay our own money for the product we’re suggesting they buy–or not.

  21. “Looking at individual bloggers is not going to be an effective enforcement model”

    They are in their infancy on this issue.

    If it came down to it, it wouldn’t be the blogger, it would be the advertiser, which I assume means that they would go after the either the book seller, like Amazon or the publisher. In either case, it’s just going to be a new hoop to jump through — probably some kind of blanket disclosure for your site if you make money on it at all.

    It’s still infuriating… the assumptions made, the implied relationship between getting something free and a good review. Please.

  22. Perhaps the Obama administration should disclose when it prescreens the participants of it’s nationally televised health care townhalls. This is an administration of double standards. The FTC should stay focused on stimulating the economy not squashing it.

  23. First – could we not drag Obama into this and make it a Democrat vs Republican issue because really that’s about the stupidest thing I’ve heard yet on the whole deal.

    In other words – get over it “Allen”.

    I am fine with disclosure – we can all disclose on each and every post we make. And if we do that then every single magazine and newspaper and television program should as well, period.

    But sending back books is unreasonable and helps no one. The publishers do not want to deal with receiving them. The reviewers do not want to to deal with shipping them and all the local charities who would otherwise have received those ARCS and/or finished copies, no longer have them. Not to mention the environmental costs of that added shipping both in materials and energy.

    Plus who tracks all this? Look at the logistics. The FTC will see that I reviewed a book at Bookslut. They (along with the IRS?) will come to me and demand to know if I returned it. Say I did – but sent it back “book rate” so there is no specific receipt. Did Random House acknowledge receipt of my one book in the millions they have going in and out any day? So now we need to create a whole new paper method of tracking all this travel of books back and forth. And what about the ones we don’t formally review? We have to prove nonreviews – and how do we do that?

    How do you prove you never wrote about a book anywhere, online or in print? How do you prove you never verbally recommended that book to anyone?

    It’s funny how impossible this proposal is, but it’s also not funny at all. Because people will get in trouble and it will cost a lot to get out of that trouble. Which frankly means that many of us just flat will stop reviewing all books from all publishers which means a lot less reviewing.

    Authors need to take note – because it’s their world that is about to change the most.

  24. In my niche of authordom, we’ve basically made a non-binding verbal agreement not to re-sell any book we’re sent for review. The reason is that no royalty goes to the author on this re-sale, and we’re aware of how often the author gets the mouse’s share of any money that changes hands.

    Now, returning the book to the publisher makes no sense. If we don’t sell them, and don’t want to keep them, we must donate them. If we reviewers must know consider a book “compensation,” can we then also write down the donation of the book as a charitable contribution? Eh? IRS?

    I probably won’t get the time to read the 81 pages of the actual rule, but it seems to me that to level this sort of restriction on blogging reviewers, most of whom review for love of the art and not for filthy lucre, resembles aiming a howitzer at an ant.

    Roll on, government.

  25. This guy is an amazing ignoramus. Even the NYT doesn’t ask for the books back from reviewers. And even this lowly blogger gets way more books than I can review or even mention. I give them to the library, but a lot of people sell them (probably including the library). Besides, what could be more OBVIOUS than an Amazon link from a blog. Talk about full disclosure.

  26. The understanding I have is that anyone who receives a product of any description for review and subsequently keeps that product personally is already liable for taxation on the value of the product received.

    I can also see that it can be difficult for readers to ascertain whether or not a reviewer has been biased by, say, being given a valuable incentive to write a good review.

    Personally, it won’t hurt me at all to say “Publisher XYZ sent me a free copy of this book”. It won’t diminish what I’m saying at all.

  27. Elizabeth — that was a well-thought out comment, one that helped make (some) sense of the regulations. I suspected it had something to do with the Mommy Blog brouhaha earlier this year, and that book bloggers were being thrown in the mix by default.

    I do have one issue, though:

    “Part of that responsibility is advising them when we didn’t pay our own money for the product we’re suggesting they buy–or not.”

    I don’t think most book bloggers — I know I don’t — set out to write reviews with the express purpose of suggesting that the reader go out and purchase the book. I think, mainly (and I may be wrong here), we’re out to share our love of reading and of books… and in each individual post, a love (or dislike) of a particular book. Whether or not that translates into a purchase of a book is immaterial.

    I’m not so naive to think that that’s not what publisher’s hope for: of course they want good buzz, and they want that good buzz to translate into sales. But, I’m just not sure that disclosing whether or not a particular blogger got a book from a publisher/publicist/author is going to make much difference in whether or not the reader buys a book. Or a difference in how a reader looks at any particular review.

  28. I must stress again that Cleland informed me that enforcement wouldn’t make sense if individual bloggers were targeted. The FTC intends to direct its energies to advertisers.

    I wouldn’t believe this for a second. He can say it all he likes, but the fact is that that’s how the rules are written and officially interpreted, and once that’s the case if someone feels like going after you they can. How many laws have people claimed are “for” one thing even though the technical language means they can do something else–and how many times have those claims actually been adhered to? This agency will do whatever it feels like, because it’s obviously not bound by such silly technicalities as the first amendment.

    Re: Elizabeth Burton, you say:
    It has nothing to do with choking the new media and everything to do with ensuring consumers are provided with knowledge they should have when making a decision to purchase.

    Then you say:
    Newspapers, magazines and other established publications have a tradition of being unbiased, and of guarding that status with sometimes draconian rules. That they may choose not to adhere to those rules is beside the point. What IS the point is that there is no such tradition or expectation with regard to blogging, where anyone can set up and start giving their opinion.

    So, in other words, there is no tradition of “unbiased” blogs, and any reader would know, going into a blog, that it just any biased person giving an opinion. Sounds like the consumer has all the knowledge he needs.

  29. My friends, this is more of the new fascist regime’s effort to throttle the internet. Just last week Obama’s appointed ICANN director oversaw the giving up of control of the internet to an international body. This is all a prelude to the internationalists creating new rules and guidelines and taxes — before demanding that the US “harmonize” it’s laws with theirs. Our fascist government is terrified of a free market in anything, products, ideas, anything. Traditionally the US has kept the internet free. By giving up control we’re giving up on enforcing freedom — because our government wants all communication licensed and controlled from the top.

  30. What problem are they really trying to fix?

    Seems like the FTC would better serve US if it devoted its energies to real consumer rip offs, like so-called “pre-paid” cell phone plans that they advertise as having “no contract” but yet their “terms of service” rip you off for leftover minutes when you go to cancel by turning your minutes money into their “liquidated damages”. They could start with Virgin Mobile.

  31. What about people like me who write book reviews for traditional print media in exchange for getting to keep (or sell) the review copies? What if my review also appears on a web site associated with the printed journal that I do book reviews for?

  32. Will this affect bloggers and tweeters not from the US but using hosting or blogging services that are based out of US? I wish there was some clarity on that.

  33. This just seems ridiculous because a lot of authors, writers and reviewers write reviews on their personal websites. Personal being the operative word here. Sure websites are out there for anyone to find and see and different people have a different number of hits. But blogging about books and giving reviews is a personal like or dislike. What I like someone else may not and vice versa. If they start making these kind of demands on blogging about books then what happens when someone blogs about their restaurant experience or a store they really liked going to or someone elses website they loved visiting. This is just ridiculous and way past the freedom of speech violation.

  34. Does participating in the In My Mailbox meme count as disclosure? (For those of you who are unfamiliar with the YA [Young Adult books] blogosphere and its terminology, a “meme” is a weekly post that follows a theme or set of guidelines. The IMM meme, which is possibly the most popular of all memes, is a post that states what books you bought, borrowed, received, etc. for that given week; including their titles and where they came from.)

  35. I am clueless as to what this all means….do we have to send back “used” books when the publisher says we get to keep them only if we review them and post a review to our blog??? This makes no sense to me!!!

  36. Getting to read and keep the book is indeed part of the book reviewer’s compensation – a tangible object that makes up for the fact that book reviewing pays about 10 cents an hour. Having to return the book and incur the shipping expense to return it would just add insult to injury.

    I have never received a book to review that wasn’t stamped ‘(advance) review copy; not for resale.’ Obviously some people don’t honour that edict. But we’re not talking about megabucks to be made on the sale of used books – or at least, not immediately. A first edition may be worth something in 25 years’ time – but that’s a big maybe.

    Odd that these new regulations seem to be singling out book reviewers rather than film or theatre critics, who tend to be plied with food and drink at gala openings. Will they be asked to return the bubbly and the canapes? And if so, in what form?

  37. This is insane. Sometimes I review books online, and I almost always link to the book when I’m done, especially if I liked it. Not because I was compensated in any way, but because I liked it and I want to, oh I don’t know, *support* the author by spreading word of their book. When people go buy it on my recommendation, assuming they do, they don’t pay me, they pay the author or the publishing company. So, what, now I’m going to have to put a disclaimer on any reviews I may do, just because I didn’t get compensation, or to assure the public and the government I didn’t? Or am I even *allowed* to review books for free? I can’t seem to grasp whether this guy is saying it’s bad to review for compensation, or it’s bad to review for free. It’s all so contradictory and uninformed about the nature of blogging and reviewing. This guy has no clue what he’s talking about, but wants to impose some sort of undefined stricture on people who may just be spreading the word about an author or book they like. Why *wouldn’t* I link people to a place to purchase a book I liked? It makes no sense so *not* link to it, but now that’s considered advertising and it’s bad? Ugh!

  38. This seems like awfully small potatoes for the FTC to concern itself about. The average price of the books I review are around $12, and even the most prolific book bloggers I know don’t receive enough to open a used bookstore with or even to contribute significantly to one.

  39. How did you interview a monkey? This guy is simply a tool, and not the brightest tool in the box either. Kudos to you sir for not exploding on him as I surely would.

  40. FTC Guy : ” I guess” “I don’t know” “case-by-case basis” “I would reserve judgment on that.” ” it doesn’t seem like ” etc, etc…

    Um, it’s coming Dec 1. Shouldn’t he know these things by now?

    The People didn’t vote on this. No city council passed a law. No state legislature passed a law. Congress didn’t pass a law. – But because some bureaucrats decided to make some new (and vague)Regulations, we have to obey this ‘law’ or face the full weight of the authority of the government:
    Get fined.
    Refuse to pay fine?- get sentenced to jail.
    Refuse to go to jail?- get physical violence used against you to comply.
    All legal under the color of Law.

  41. Clearly, the biggest threat to a free market economy is when a blogger gets a book for review. I heard that a woman named Joan in Wisconsin nearly bought a copy of LOVE IN THE TIME OF CHOLERA because she read a recommendation on her sister-in-law’s blog. Thank god we have the FTC to protect us.

  42. This strikes me as a case of legislation for legislation’s sake. I don’t think there’s anyone out there who doesn’t grasp that people get review copies of games, book, etc – the FTC seems to want to make sure this is obvious to make sure people don’t feel defrauded in some weird way. Since I have yet to hear about anyone suing a local TV station or newspaper for not disclosing that a reviewer didn’t make clear they got to see a show or film for free, I guess this is an example of the government being ahead of the game in the litigation world.

    This is one step away from requiring that this “compensation” be declared on taxes. In the same cash-grabbing way that they started making people declare the lavish gifts they get in their Oscar party bags, it’s another case of trying to get an much out of the taxpayer as possible. they can’t stand the fact that they haven’t figured out how to monetize everything people do.

    If you hear a song on the radio, and as a result you don’t need to buy the record since you’ve already heard the song, obviously that saved money should be counted as income. Right?

  43. I can understand where the FTC is going with this for high value products, where the decision to buy may be based on reviews that may not be impartial or just from John Doe Consumer. I tend to suspect that many times product reviews, especially if the product is expensive, are in part done by the manufacturer or distributor. However, that’s not really controllable since most of those are not traceable.

    With low value reviews of things like books, movies, music, etc., it’s obviously not worth the time or trouble for the FTC to pursue them, nor is there enough value in ‘compensation’ for anyone to go to the trouble of trying to track them down. However, that doesn’t protect the little guy from an over-ambitious agent running him/her down and fining them $11,000 for a review of an $11 book. What we have here is (another) poorly written law that has not been thought through before enactment and obviously Mr. Cleland is touting the party line. I receive ARCs for ‘influencing’ and post ‘reviews’ on my blog as well as on Amazon, etc. Does posting a review on Amazon qualify as compensation too? You can’t return ARCs. Publishers generally have bookstores tear the covers off of unsold books instead of returning the whole book. It just doesn’t make sense. I also review books I purchase or borrow. I don’t make a living from this, so I don’t keep records and I have yet to have a review copy, even an ARC that’s worth anything as a collector’s item. Most authors’ books, even first editions are simply ‘used books’.

    That’s my vent.

  44. Isn’t this just a tempest in a teapot?

    Lets simplify this:

    What we now have to do that we didn’t before:
    Put the words “The publisher sent me a copy of this book for free” in each review.

    OR

    Send books back to publisher and not link to where books can be purchased, or get any other compensation.

    What happens if we don’t:
    Fine of up to $11,000 per incident.

    Hmmm. This doesn’t seem like a big deal to me. It actually seems like something EVERY reviewer should be saying anyway.

    Yes, its a double standard that newspapers and magazines don’t have to make this disclosure. So complain and ask the FTC to make them do this also.

    But it doesn’t make sense to me to get bent out of shape over adding a few words to a review that probably ought to be there anyway.

    And, I should add a couple of things to this discussion, since they have been brought up by other comments, and in spite of the fact that they are really not relevant:

    1. IRS rules are different from FTC rules. The one doesn’t control the other. What is compensation under FTC rules isn’t necessarily compensation under IRS rules.

    BUT, as one comment above mentioned, free books given to reviewers ARE technically compensation under IRS rules, and have been for at least the 25 years since I got an accounting degree and demonstrably much longer. Its just so hard to track and of such low value that the IRS generally ignores them. The IRS usually requires that payments over $600 be reported, and since no book is more than $600… [However, if you are selling your review copies for more than a few thousand dollars a year, it could be caught in an audit.]

    2. Any connection to the Obama administration in this case seems spurious. Last I remember, the FTC is a bipartisan commission, with commissioners selected by both parties in congress. If there is some kind of agenda to take away basic freedoms in it, then the Republican commissioners are complicit, given that these rules passed on a 4-0 vote.

    3. roderick taylor’s comment (on October 5th, 2009 11:38 pm) is particularly dense. Roderick how paranoid are you? So international organizations are incapable of and have no interest in being fair and preserving freedom and we are? And you then assume that other nations have no stake in how the Internet is run, and we should control THEIR Internet! That doesn’t seem particularly “Free” to me!

    Not only is your rant off topic, its also self-serving and unsupported drivel!

  45. Disclosure is definitely a required step to avoid deceiving consumers…as we always have requested from start, 3 years ago for the nearly 300bloggers outreach campaigns we have deployed with BuzzParadise (http://www.buzzparadise.com) in more than 12 countries.

    But why are bloggers treated with more severity than mature traditional media?

    Most offline press & TV journalists are offered outrageous gifts & travel invitations year along and I never saw any disclosure about it, not once (and don’t tell me the newspaper kept the book or they were not the ones hosted in luxury hotels for x days just to test a suncream)! I am 200% for disclosure but I really think that FTC and WOMMA should be asking the same from the other media to be fair… Consumers trust is as important whether you are a TV audience or a WOM audience.

    Moreover fining up to 11.000$ bloggers who are in 99% of the case animated by passion and not profit is just wrong in my personal opinion!

  46. Boy, this is frightening – a government without constraints. I review books for BookPleasures.com. I do get a copy of the book I’m reviewing, but it as compensation for the review is ridiculous. The time and effort I put into my honest reviews far outweigh the price of any book I’ve received.

    Reviewing books is a tool to help authors and readers connect – for the average blogger it’s not about monetary compensation.

  47. What have these ‘regulators’ been smoking? As an author it’s hard enough to find someone to review my books without extra roadblocks like this. It might be politically correct to make such demands but it’s also naive. It’s common knowledge that reviewers get to keep the book. People who like what they read in the review need to know where they can buy the book. This is nothing more than a tax grab because these regulations certainly don’t support anybody’s freedom of speech or thought.

  48. “Hugely popular” bloggers are popular because of the relationship they have with their readers. If they destroy that relationship, they will lose their huge popularity.

    Was this really a huge problem before? Are there any specific examples of a person disappointed with a product after a review?
    Worst of all, while the focus has been on blogs, what’s going to happen infomercial testimonials?

    Can we call this the “Tom Vu Act”?

  49. We should remember that books were the example used, not the focus of the guidelines. I realize that this could have been made clearer, but it was not. Mr Cleland could have been better prepared and more articulate, yes.
    the vagueness, is bothersome and troublesome. I think that the advertisers relationship is the key in these guidelines, not the individual bloggers. But still, the trouble is that with such vague and broadly swabbed guidelines, interpretations by a court, or government entity, could go into directions that no one foresees at present. Resulting in costly litigation that could easily bankrupt an individual blogger.
    The FTC has been accelerating their investigations into internet advertising, specifically scams that center upon the sale of CD’s and digital information that leads to reoccurring billing.
    They have been inundated with complaints, some 220,000 from consumers on one such product alone, Google Money Tree.
    Many of these products were sold through review sites, specifically blogs, or flogs (fake blogs.
    This could be their initial approach to counter these tactics, and not realizing the ramifications of their wording, they are hurting an industry as a whole. By going after a few bad apples, they are spilling the entire barrel, and leaving all of the apples vulnerable.

  50. Ok so I review energy drinks. Companies send em and I drink them. Sometimes they throw in a few stickers and maybe a T shirt. I never say I will give them a good review and sometimes they are not happy. So all I need to do is mention they supplied me with a drink and I am covered? As for taxes if I said I was a small business then the cost of running my site(not a blog) such as hosting, time, computer equipment, gas to locate drinks I do buy and such would far outweigh the value of the products I receive.

  51. So if my review policy on my blog states: “I have a loyal readership who has come to expect honest book reviews. If I don’t like a book, I say so.” Where is the expectation of a positive review?!?!?

    This is so much crap…don’t these people have better things to do with their time then threaten book bloggers (who probably LOSE money by the time they read and review the book). Mark my words…the very first case that comes up will end up in court. This is such a double standard re: print reviewers and bloggers.

    Thanks for posting this.

  52. […] If you’re a blogger, you’ve probably heard about the Federal Trade Commission deciding to come down on blogs without paid editors and whether they got a free copy of things they review. (For more information, see this interview with Richard Cleland of the FTC.) […]

  53. Does the use of the word, “Compensation”, open the way for income tax assessment? Will the IRS now be studying bloggers book reviews to assess the amount of “Compensation” they have received? Even if you gave a bad review, the IRS may consider the retention of a book, even if you didn’t like it, as being compensation.

    Maybe I’m just naive, but I always try to look at the next step.

  54. My crotchety former editor insisted we put all freebies into a communal company yardsale and pay for them – donating the proceeds to a charity of our democratic choosing.

    “I put $20 in the yardsale envelope – I have atoned for us all,” he declared after the chocolate festival sent a care package of perishables that couldn’t wait for the next irregularly scheduled charity sale – juice from the chocolate covered behemoth strawberry dripping down his chin.

    So, Mr. Cleland, do we mail the raw fruit back to the festival organizers, or just walk downstairs and hand the whole box to that homeless guy who dressed like a pimp and hung around the Inner Harbor?

    Would we have to declare the value – minus the aggregated donation to Friskies Animal Shelter?

    How do you value a bag of dirt, a single shoe, a bra or any of the other bizarro PR stunts we have been mailed over the years? (Oh, I do miss working in a newsroom!)

    What if the freebie is from a PR person – vaguely connected to the product or service they are paid to hawk (a care package including single-shot servings of Skyy Vodka for a new spa)?

    Is that any different from samples of a product a company is desperate for a health reporter to write about?

    What if I drink the Vodka but didn’t write about the spa?

    Where do I declare that?

    Who declares the inevitable items that “fall off” the yardsale table?

  55. “Also what about non-american bloggers? What about blogs hosted offshore and funded by non-american persons?”

    I’m a Canadian living in Seoul. This morning I liquidated my wife’s and my retirement monies. We plan to network with the publicists of the major houses by air-delivering them spicy hors d’oeuvres and getting special placement on their rolodexes. (There is, after all, nothing quite like word of mouth in Gwanghwamun.) We then plan to open a used book shop with all our loot.

    Let the freebies pour in!

  56. OK, so we get to keep a book. Let’s say the book is worth $20 — a reasonable price in today’s market. If we spend 20 hours reading it and another several hours writing the review, posting the review and then monitoring the post for comments, etc., we’ve made … what? … 50 cents or so an hour? If that equals compensation, maybe we need to take another look at the labor laws! Now, if we have to return the book, we can add to that the postage it would cost us and we are basically paying the publisher for the opportunity to read the book. We’d be better off going to the book store and purchasing our own copy if that were the case. I’m very curious about where all this came from. I’m sure this isn’t out of the blue. Someone, somewhere had to bring this up and I wonder why?

  57. I think it is appropriate to point out that the regulations released by the FTC have been in the works longer than this administration has been in office, and the previous administration was a different party.

    However, Mr Cleland’s focus on book reviewers, even if specifically for this interview, seems to indicate that he does not read book reviews to decide if he should buy a book, or he would be aware that even reviews that call a book worth reading often point out flaws in the book. I think that Mr. Cleland’s education on book reviews could begin with emails that send him book reviews- about books that are good, books that are bad, and books that the reviewer has mixed feelings about, to give him some familiarity with book reviews in general. It would also be cheaper than sending him the copies of books.

    I also would like to reiterate the point that even unpaid bloggers who read books and review them still have used valuable time reading the book- and the average price of a book is not likely to reimburse them even minimum wage. Yes- it is easy enough to say free copy reviewed (using about 18 spaces of 140 a tweet)- but it should apply to every reviewer anywhere, in any form. Poorly plotted, Mr. Cleland, takes up less space and is more useful.

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