Last October, the Federal Trade Commission (FTC) issued guidelines stating that bloggers who offer endorsements must disclose any payments they have received from the subjects of their reviews or face penalties of up to $11,000 per violation.
The agency, charged with protecting consumer interests, had not updated its policy on endorsements in nearly three decades, well before the Internet became a force in shaping consumer tastes. Now, new rules attempt to make more transparent corporate payments to bloggers, research firms, and celebrities that help promote a product.
As the importance of social networking and blogging continues to grow in today’s increasingly Internet-dominated business world, the FTC has revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising, published in the Federal Register at 16 C.F.R. Part 255.
These new guidelines address the application of Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices and unfair competition in or affecting commerce. If your company provides services or sells products and your employees are blogging about them or talking about them on their Facebook accounts, the presumption may be that they are doing so with the company’s support and for the company’s benefit. This could lead to liability for your company for false statements made by your employees under the Federal Trade Commission.
This is another reason to review your employee handbooks and review policy on social networking, especially if your company permits employees to Facebook during regular business hours.
