Tuesday, October 6, 2009


Bloggers in the United States will now have to disclose their relationships with the subjects they cover, according to new FTC rules. (Associated Press)U.S. authorities are using the threat of big fines to force bloggers to disclose their relationships with the companies they write about, but jurisidictional confusion means no similar mechanisms exist or are under consideration in Canada.

The Federal Trade Commission on Monday announced new rules that require bloggers in the United States to disclose "material connections" — or "connections that consumers would not expect" — with the subjects they write about. The connections can take the form of outright payments, advertisements or free products given to the blogger by the subject.

"The post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service," the FTC said in a statement on its website.

Bloggers who fail to disclose such connections will face fines up to $11,000 U.S. per post, and complaints will be dealt with by the FTC on a case-by-case basis.

The rules in Canada, however, are less clear because of confusion over who has jurisdiction over bloggers. The Canadian Radio-television and Telecommunications Commission says that while it regulates some aspects of internet connections, it does not oversee content delivered over the web.

The CRTC is in the midst of deciding whether it should begin enforcing some sort of Canadian content rules — similar to those found in television and radio — on the internet.

The Competition Bureau, which does have jurisdiction over truth in Canadian advertising, says it is looking into the issue of bloggers and disclosure, but adds that its measures are not as proactive in preventing abuses as the FTC's.

"Typically we're not in the business of what people have to say. Whatever you say has to be true, but it's not about what you didn't say," said spokesman Ian Jack.

The U.S. agency also has a clear mandate to govern what appears on the internet, whereas several bodies in Canada, such as the Competition Bureau and the Privacy Commissioner, share powers.

"It's one of these multiple jurisdictional things in Ottawa unfortunately in a way that just isn't [there] in Washington, which probably gives them more ability to identify any problem they see on the internet and do something about it, or think about doing something about it," Jack said.

Janet Feasby, vice-president for Advertising Standards Canada, the advertising industry's self-regulating body, said she has not received any complaints about bloggers so far.

She said if any complaints do come in, the group could evaluate them under the same rule used for determining disguised advertising techniques in other media. That rule states that "no advertisement shall be presented in a format or style which conceals its commercial intent."

John Lawford, counsel for the Public Interest Advocacy Centre, a consumer watchdog group, said that any existing rules are designed to only go after the advertisers themselves, and not middlemen such as bloggers.

"[The FTC] is trying to put liability on the blogger, which I think might scare the heck out of a bunch of individuals," he said.

While he hopes the new rules don't cast a pall on genuine conversation online, Lawford said they should help to root out bloggers who are trying to dupe consumers — a situation that is definitely happening in Canada.

"I have my own usual-suspects list myself," he said, declining to name specific websites.

Thomas Purves, who runs the Wireless North blog from Toronto, said the FTC's move is a double-edged sword in that it will help stamp out some deceptive advertising, but it will also cramp individuals trying to build small businesses.

"It's tough for a consumer because you don't know what to trust. It's relatively easy for a company to pay folks to say nice things about them," he said. "At the same time, it's tough for someone to have an independent business doing it because there isn't much money in it."

Purves, who said he sometimes accepts free products yet retains the right to decide whether to write about them or not, said the FTC will also have a hard time enforcing its rules because of the evolving nature of social media.

"Is a Twitter post a blog post? Do I have to disclose in 140 characters that I was paid to post on something?"

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