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FTC May Soon Hold Brands Responsible for False Product Claims Made in Social Media Realm

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The Federal Trade Commission is expected to adopt a new set of guidelines that will make brands responsible for incorrect statements made by endorsed blogs that review their products. Here’s how the Financial Times put it:

“Revised guidelines on endorsements and testimonials by the Federal Trade Commission…would hold companies liable for untruthful statements made by bloggers and users of social networking sites who receive samples of their products.”

OK fine, the FTC is calling bullshit on phony endorsements. Fine. But can the brands be held responsible for what’s said by bloggers?

“Brands should participate in blogs and other social media just as people do,” writes Mike Lazerow, chairman and CEO of Buddy Media, which creates branded Facebook apps for their clients. “they should be themselves and be transparent in how they act. Paid endorsement is paid endorsement and should be labeled as such.”

Then there’s the companies whose job it is to pair brands with bloggers willing to write about those brands. One such company, izea, has a clear code of ethics on the subject;

“Bloggers are free to write or say whatever they want. IZEA has no restrictions on how bloggers express their genuine thoughts on an advertiser’s product or service. IZEA will neither withhold payment based on a negative conversation, nor do we allow advertisers to force bloggers to edit their post to remove critical statements, ever.”

izea also requires their bloggers to disclose that they were paid to write whatever content they’re pimping, lest you were concerned. PayPerPost, another similar venture, uses a nearly identical code of ethics.

And then there’s the Word of Mouth Marketing Association (WoMMA), which both of the aforementioned companies belong. And guess what WoMMA says &#151 to be in their group, you have to do all the ethical stuff we just mentioned, and more. Click here to learn more about their requirements.

So our question is why has the FTC made a stink about a problem that’s already under the WoMMA microscope? The FTC’s current guidelines on advertising testimonials and celebrity endorsements haven’t been updated since 1982. But are they overshooting the mark?

Oh and a bunch of the trade groups are kissing FTC arse here. Not that there’s anything wrong with that.

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