You can buy a lot of wine for $11,000: Does the new FTC law fine bloggers who don’t report payment or gifts?

Twitterland and the Blogosphere has been hopping lately with news that the FTC is going to start fining bloggers (and presumably other social media users) who do not make it clear that they are getting paid to promote a product. Many wine bloggers who subsist on samples, free or discounted wine shipped to them by the winery or given to them by the winery will run the risk of getting fined if it is not clear that they’re blogging for wine, blogging for the wine industry, or paid in some way.

PLEASE NOTE: NO FREE WINE WAS CONSUMED WHILE WRITING THIS BLOG POST!

While there’s been a lot of whining amongst the winos I follow, as well as a general uproar, I think overall this is a good idea. I can usually tell when someone is pimping a product. But not always. And the general public is not as well versed in the sneaky ways of affiliate marketing and various nefarious schemes to make it seem like regular folks are writing about products.

Personally, I much prefer to say where, when, and how–and to know that transparency is the industry standard.

An article today by Jay Yarrow in the Silicon Valley Insider says that’s not what the FTC means. According to the article, “The assistant director at the FTC  overseeing this ruling, Richard Cleland, says that’s not true. He tells Fast Company:

That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?

Mashable was one of the first sites to report on the FTC change.

http://mashable.com/2009/10/05/ftc-blogger-endorsements/

And here’s a selection of others who rapidly followed suit:

http://www.nytimes.com/2009/10/08/opinion/08sicha.html?_r=1

http://ow.ly/t3Qg

In related news, a blogger temporarily lost her unemployment benefits in confusion on what kind of income she was receiving from Google Adsense:

http://www.mediabistro.com/mediajobsdaily/omgwtf/blogger_loses_unemployment_benefits_over_238_in_adsense_pay_139537.asp

It’s a new world out there. Watch your step!