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FTC Guide re Endorsement Update

I spoke with Richard Cleland this morning. I shared with him my concerns. I think that the enforcement of the rules are still in the developmental stage. Cleland reiterated what he told other blogs that this is the educational period. I don’t see the FTC regulations being revised, but apparently there is some room for crafting guidelines for enforcement.

I suggested a warning and opportunity to cure and Cleland liked that idea. He said that they have used it in the past in the health product field except they are called advisory letters.

I asked about the issue of the fines. Cleland stated that this is something the AP took out of context. The FTC has no ability to levy fines. A charge must be made and taken to an administrative law judge and a cease and desist is requested and provided if the FTC fulfills its burden. If the C&D is ignored, then a civil penalty can be requested for up to $11,000.00. The full explanation of enforcement and penalties for all FTC violations can be read here.

No case would be brought in federal court unless it involved a very serious fraud else the FTC would likely be frowned upon by the court for wasting judicial time.

We discussed the issue of Twitter and whether each and every positive statement about a book that had been received for review would need to carry a disclaimer. Cleland was of the opinion that it would however we did discuss the issue of the product itself. In many other industries, the review product is nearly always returned and not kept by the reviewer. In the book industry, it is common for all reviewers, regardless of whether they review for mainstream publications or whether they review for a personal blog, to keep the books that are reviewed. I also brought up the issue of e-arcs and how any blogger could prove that the product had been deleted or kept.

I’m fairly certain that Cleland is not familiar with the book industry or the book blogging industry. He certainly was open to hearing more from us. I plan to continue to discuss this issue with him.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

37 Comments

  1. KMont
    Oct 06, 2009 @ 11:34:08

    Very interesting. The efforts you’re making and lengths you’re going to are appreciated. Because, frankly, for the second day in a row all I’ve really gotten out of this (aside from a great reaction post over at The Book Smugglers) is a headache. Till now.

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  2. ms bookjunkie
    Oct 06, 2009 @ 11:48:46

    Jane, you’re my hero!

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  3. SonomaLass
    Oct 06, 2009 @ 11:49:37

    Jane, I am so glad you called him! It was obvious from the Galley Cat post yesterday that the man was clueless about reviewing books and how that differs from other products. The whole “keeping it” thing, for instance — there’s a big difference between keeping a book you’ve already read and keeping something like an electronic device that you could continue to use. As for how to “return” e-ARCs? Bah.

    I am encouraged by this a bit. The Twitter thing is still odd to me; I will miss your random “reading this & liking it” tweets, but CYA is obviously the best approach here. Was Cleland in agreement that “endorsement” means positive statement? Or are negative reactions also required to have a disclosure statement? Hmmm, I wonder if a disclosure statement with a hashtag could be seen as applying to the entire thread that followed? I hope they do send advisory letters first; clarifying that policy would help relieve a lot of angst among small independent bloggers.

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  4. RStewie
    Oct 06, 2009 @ 11:59:54

    @ms bookjunkie: Pishaw! You mean Heroine!

    Thanks for the update, Jane, please do keep this in your sights as an issue. Even though I don’t blog (or get free books, dammit) I am very interested in seeing the development of the story…and I know I must not be the only one.

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  5. Patricia Altner
    Oct 06, 2009 @ 12:24:39

    I agree, Mr Cleland knows nothing about book blogging and what is entailed. He needs to be educated. That’s what you have been doing and it is very much appreciated.

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  6. katiebabs
    Oct 06, 2009 @ 12:29:29

    Cleland admits he’s not familiar with the book industry or the book blogging industry? Shouldn’t he and the others at the FTC do their research on this before they pass these rules?

    It ‘s comparable to someone boycotting a book or movie and not even reading the book or seeing the movie first.

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  7. Jane
    Oct 06, 2009 @ 12:31:59

    @katiebabs: The FTC Regs are “guides” or the FTC’s interpretation of the law and as such provide guidance as to what would cause the the FTC to investigate you.

    I don’t know that it’s comparable to boycotting a book and not reading it first (I mean, isn’t the point of the boycott to prevent people from reading it first?).

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  8. katiebabs
    Oct 06, 2009 @ 12:36:46

    There are many ways to interpret these laws it seems. People will find ways to work around it.

    Sorry, trying to get a handle on this whole situation makes my head spin.

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  9. ms bookjunkie
    Oct 06, 2009 @ 13:18:57

    @RStewie: Hero, heroine, whatever… Jane kicks ass!

    I’ve decided to stop freaking out about this issue. I don’t live in the US or have a blog but I do tweet (all right, mostly squee) about positive reading experiences. Most of the books I mention I’ve purchased myself, maybe borrowed a few from the library. That shouldn’t be a problem, right? In the past year or so, I’ve received maybe ten books from blogs and authors as contest wins etc. It shouldn’t be too difficult a task to remember which ones those are… then of course there are the Tor and Harlequin -and Mills & Boon!- freebies… How should those be handled? They were/are available to everyone. This really could get complicated. *huge sigh*

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  10. ReacherFan
    Oct 06, 2009 @ 13:39:37

    How weird that the FTC is concerned with tiny little blogs and not multi-billion dollar companies who decide what news we hear and how much we hear, thereby shaping public perception of an issue. Or the Weather Channel over-hyping everything from hurricanes, to snowstorms, to ‘It Could Happen Tomorrow’ speculative weather programs. Big companies can make a buck – billions of them – without having their bias, preferences, or integrity questioned. Some little blogger is the source of all evil if they keep a book.

    I wonder what we’re supposed to do with the free food? Throw-up when we’re done? Do I declare that stale mint I got from NCP or the book marks from Ellora’s Cave? Oh yeah, that will be sure to buy a favorable review.

    Once again, government runs amok and goes after those they can intimidate and not those who are the real problem – because those big boys can afford the best lawyers!

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  11. Debra Saturday
    Oct 06, 2009 @ 14:51:42

    Disclosure: I read. I review. I make no money. I was going to give away my reviewed books. Maybe not now. I do not want others to get into hot water with FTC.

    Further disclosure: I had coffee this morning. Two cups of caffeinated coffee. Oh yes, with powdered creamer and two teaspoons of real sugar. The coffee, creamer, and sugar I bought with my money at my local food store.

    I know this is over the top….but so is requiring everyday people to disclose review books as ‘payment’ for a possible good review.

    (Thanks Jane…for your blog…I read it always.)

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  12. DS
    Oct 06, 2009 @ 16:26:42

    I remember earlier this year there was a fracus about Belkin advertizing for positive reviews of their routers on Amazon’s Mechanical Turk site. Here’s the url to the TechCrunch article. http://www.techcrunch.com/2009/01/17/belkin-paying-mechanical-turk-users-to-write-good-reviews-on-amazon/ It was some insanely small amount like $.65 per review. Then there was the blogger who had a separate site with her price list for reviews. Can’t remember who that was but I thought it was a substantial amount.

    Also there was a bit of a fuss recently on one of the AAR boards about Rob Thurman offering books for reviews. I couldn’t get all worked up over that one. (ETA: OK, I checked out the reviews, the first were a bit judiciously critical then all of a sudden 38 five star reviews. Someone has started a discussion on the solicitation of reviews.)

    Belkin and the blogger with a price list are two situations that I think really need to be disclosed. I generally take bloggers who also post reviews to Amazon with a whole cellar full of salt. In the romance and urban fantasy sections there are a suspicious number of 5 and 4 star reviews that appear a bit corporate.

    I also noticed a new feature on Amazon where reviewers can check a box and get a line at the top of the review stating that is is an Amazon Verified Purchase if Amazon can match the review up to an item bought by the reviewer. I did think it interesting that a book I downloaded for free was considered a verified purchase.

    There was also a WSJ article about grade inflation on the internet when it came to reviews. This seems to be a hot topic.

    Conclusion? The FTC is moving in the right direction but they need to not be too heavy handed.

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  13. Laura Kinsale
    Oct 06, 2009 @ 17:24:41

    Good for you checking with the top.

    Sad thing is, no matter what the FTC does now to “clarify,” the damage is done. This is already having a chilling effect on what is clearly free speech. People are confused, and so they play it safe and don’t say anything. Even those who never got something for free in their life are scared and bewildered.

    Same guys who let Madoff run loose for years…

    ReplyReply

  14. The Daily Square – Breathe Lies Edition | Booksquare
    Oct 06, 2009 @ 17:30:51

    [...] FTC Guide re Endorsement UpdateJane Litte from Dear Author also called the FTC. Excellent. [...]

  15. Heather (errantdreams)
    Oct 06, 2009 @ 17:32:07

    I just wanted to say thank you for being willing to go through this effort. I know I, as a book blogger, am benefiting from your reading, clarifying, phone calls, etc., and I really appreciate that.

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  16. anon...
    Oct 06, 2009 @ 17:47:05

    When I say this, I’m not talking about dear author. Even though I’m not always in love with your reviews, I do believe you do a great job here and I’m objective when it comes to something I think is professional.

    But guys, seriously, there are a lot of questionable reviews and reviewers out there. And these questionable reviewers and review sites make the good ones look bad.

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  17. Nadia Lee
    Oct 06, 2009 @ 19:49:42

    Why is anyone surprised that the government wants to regulate something it does not understand?

    I’m glad he clarified what the ruling means, but I’m still skeptical until he issues a clear official AND written statement.

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  18. Cassandra Waites
    Oct 06, 2009 @ 20:30:29

    What I’d really like clarification and reassurance on is whether the rule just applies to freebies provided specifically for review, or also to freebies provided to the general public that a blogger just happened to pick up and have a worth-the-time-typing opinion about?

    I don’t get freebies to comment places. I wouldn’t accept freebies or pay to review or blog about specific things unless I was working as a staff blogger somewhere under the more traditional salary system.

    But I do go to book festivals. And there’s always the mix of tables with the free lit magazines, the magazines offering free back issues they wanted to get rid of, and sometimes even free books – the local book festival had a freebie box right next to a used book sale this year, with all the free books coming from the same publisher.

    Does talking about something I picked up at a random table as a random person count as something that has to be disclosed, or does this disclosure regulation only apply to people specifically being given things to review?

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  19. Jane
    Oct 06, 2009 @ 20:35:24

    @Cassandra Waites: I don’t think it applies to people who just occasionally get a free book. It applies to people who regularly receive books.

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  20. Pat Brown
    Oct 07, 2009 @ 07:55:14

    Has anyone thought about how they are going to enforce this? Is the FTC going to patrol the Internet and check out the millions of blogs out there looking for reviews? Then what? how do you find out if the book or product they’re reviewing was a freebie? The logistics are simply impossible. They have a hard enough time tracking down pedophiles and Internet scams that actually hurt people.

    Personally when I first heard of this I looked to see if it was April 1st. There is no way the FTC or any government agency could police this. I think people are getting in a frenzy over nothing and now you say they can’t levy fines at all.

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  21. Jane
    Oct 07, 2009 @ 08:04:10

    @Pat Brown: They do have people that surf the web, but more importantly they will respond to complaints. One thing that I am concerned about is that those who do not like a particular blogger or reviewer will lodge complaints with the FTC. It’s easy to do (can be done online, in fact).

    The FTC cannot levy fines but can seek civil penalties.

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  22. Pat Brown
    Oct 07, 2009 @ 08:09:22

    That would be opening a nightmare can of worms. Prove the book was a freebie. Prove the review was biased. If they start trying to enforce this, yes, you will get malicious complaints — we already see blogs that seem to run on malice and lies. How long before you get counter suits going and flame wars all over. I still think it’s an unenforceable boondoggle waiting to happen.

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  23. Sunita
    Oct 07, 2009 @ 08:55:04

    @Pat Brown: But unless I read the various discussions about this incorrectly (which is entirely possible), the burden of proof is on the Commission, not the blogger. And wherever the burden of proof lies, they simply don’t have the personnel to go after relatively small bloggers being pursued by malicious interests. Think about the Super Bowl Wardrobe Malfunction case and the FCC; that was seen by millions of people worldwide, the complaint was filed by powerful interests, and it *still* took years and years to get a ruling (and we’re not done yet). And the FCC has been considered to be more politicized than the FTC. Getting a commission, whether it’s the FCC, the FTC, or the EEOC, to act on an individual complaint is not easy. There’s a pretty high bar, and it takes time and persistence. That’s why I think that the people who are interpreting this as directed toward the producers rather than the bloggers are closer to the mark.

    I haven’t been able to figure out whether these guidelines are in the “notice for comment” period or if they are a done deal. The APA requires that interpretations of statutes by agencies be publicly disseminated and open to discussion for a set period. These rules don’t take effect until December 1, so are they in the public comment period now? It’s been a while since I studied administrative procedures and regulations, so I’m pretty rusty on this.

    And even if they’re a done deal, they’re agency interpretations of statutes. Congress can always pass legislation clarifying the statute; they do that all the time. At least they used to, back when they legislated on a regular basis.

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  24. Jane
    Oct 07, 2009 @ 09:00:16

    @Sunita: No, the comment period started back in 2007. It was clear to me that the enforcement of the new regs is not firmed up yet. But, I do think that there is no better way for the FTC to put the fear of god into bloggers than to target a smaller blogger. Target one smaller blogger and one major blogger and the entire blogosphere freezes up.

    I’m not going to rest easy until there is some firm public commitment about the use of warnings and other enforcement details.

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  25. Sunita
    Oct 07, 2009 @ 09:14:04

    @Jane: Okay, thanks. That’s still a really long notice and comment period, though. I was thinking of a procedure that usually has a shorter period of time, but since I can’t remember the exact reg, I’m not going to be able to explain it. :-)

    I’m still not seeing *why* the FTC would want to put the fear of god into small bloggers, though. My experience with bureaucrats is that they are much more likely to err because of their inability to see unintended consequences than to go after someone to make an example of them (although some agencies in the previous administration clearly are an exception).

    The closest “make an example” cases I can think of are the downloading cases, which of course were civil suits rather than administrative investigations. And while I’m sure those outcomes have deterred some people from similar behavior, it’s not as if the aggregate amount of downloading has gone down much since then. Even the Pirate Bay case hasn’t shut down the other torrent sites, it’s just given people incentives to create new systems.

    I understand why you take this so seriously, and I don’t want to minimize the possible effects of the change. Unintended consequences work both ways, after all; it could be that Really Bad Things will result from these regulations even if the FTC *didn’t* intend them. I just think the probabilities of such events occurring are pretty low.

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  26. Jane
    Oct 07, 2009 @ 09:16:35

    @Sunita: No, I think the probability is low too, but I am definitely in the wait and see mode. I’d rather comply than run the risk of being investigated, having to “prove” my innocence, etc. As a lawyer, there are real world implications for running contrary to the law.

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  27. Karenmc
    Oct 07, 2009 @ 09:17:26

    There's a blog on the Huffington Post about this:

    http://www.huffingtonpost.com/ian-paul/new-ftc-blogging-regulati_b_311851.html

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  28. Sunita
    Oct 07, 2009 @ 09:30:53

    @Jane: Oh yeah, you are in a uniquely sticky position, as a practising lawyer. But your disclaimer strikes me (obviously IANAL) as being comprehensive in meeting the apparent requirements, to the extent that we can figure out what they are.

    And one of the reassuring things about those asshats who go after you and post your real-life info on the web is that the most cursory investigation reveals their total asshattery, even to an unenlightened bureaucrat.

    I think that as long as the FTC doesn’t get bogged down in investigating frivolous claims (and they have a strong interest in avoiding that, if for nothing more than self-preservation and their success rate), the bloggers whose behavior will be affected most fall into two camps: (1) the people who are corporate shills who we can’t tell are corporate shills, because the extent of their shilling will be revealed; and (2) people who are rah-rah for a particular brand, author, or company, because their disclosures will reveal the pattern. Blogs like DA, which are much more catholic in their coverage, are likely to rise in readers’ estimation of their reliability.

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  29. Jane
    Oct 07, 2009 @ 09:37:16

    @Sunita I’m not worried about my interaction here, it’s beyond the confines of the blog and readily available disclaimer on the sidebar. Cleland told me he believed that a disclaimer could be made in 6 or 7 characters on Twitter. I’ve been trying to figure that out.

    “I got it for free”
    “Pub sent” would work as would “ARC” I suppose.

    I see it as a hassle outside the blog.

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  30. Sunita
    Oct 07, 2009 @ 09:55:03

    @Jane: The Twitter thing is so strange. I assume it’s because there are so many corporate Twitter (and Facebook) accounts now that they’re trying to cover all their bases, but it feels unworkable in practice.

    PubSent or PubComp or CompCopy? Promo? That covers ARCs and other types of promotional copies.

    One of the most depressing things about this, the more I reflect on it, is that it turns a blogger/tweeter/facebooker from a normal person into a representative of companies. Even when you’re on twitter, talking about books with friends, you have to identify in a 140-character message as someone who’s received a complimentary copy. Just because twitter gets coopted by commerce, all the people do too? I understand why “public” people might have to identify. After all, I doubt many of Ashton Kutcher’s twitter followers know him in a RL or personal sense. And when journalists have twitter feeds, their personal and professional tweets are all mashed up together. But for bloggers who aren’t using it for professional or for-profit communication?

    I wonder if you could have a disclaimer on your twitter page that provides a symbol that represents that disclaimer in your tweets?

    Okay, now I understand why you’re driven nuts by this. Thinking about it for more than 2 minutes at a time is injurious to one’s common sense.

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  31. Jane
    Oct 07, 2009 @ 11:15:28

    @Sunita I like the “CompCopy” a lot. I was looking into commenting systems to see if there was a footer that could follow me around. Hi, I’m Jane and I get free books. The book I’m talking about may or may not be one I got for free. Reader beware.

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  32. Phyl
    Oct 07, 2009 @ 17:26:32

    Just one more example of how corporatism ultimately destroys the real human value in everything it touches.

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  33. Lisa
    Oct 07, 2009 @ 17:49:48

    I have also posted about this and I’m glad to see Mr. Cleland admit he doesn’t know anything about book blogs, because that was pretty obvious.

    I don’t think it’s a big deal for my blog – I generally state at the bottom of each review if the book was an ARC. What I find really annoying is the double standard at work. A newspaper – which also gets free review copies – does not have to disclose that information. Somehow they think that the fact that the newspaper, not the reviewer, owns the book makes a difference?

    I am very concerned about the possibility of these complaints being used for revenge. We have already had instances of bloggers being harassed by authors who didn’t like their review – the possibility of a disgruntled author being able to cause this kind of trouble for me is a little scary.

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  34. Writing Roundup, October 9 « Uncategorized « Jen's Writing Journey
    Oct 09, 2009 @ 07:04:40

    [...] FTC Guide re Endorsement Update The reviewers at Dear Author are following the issue closely and ensuring that they comply with the new regulations. Their blog is a good one to add to your reader, if you don’t already subscribe. [...]

  35. Urs E. Gattiker
    Oct 09, 2009 @ 07:21:45

    This is a nice post. We addressed this issue a bit from a different viewpoint, namely fairness and justice.

    It seems unclear why journalists do not need to disclose that they get products for free to write reviews while bloggers should.

    Our readers are concerned about this issue as far as principles are concerned. I find it also interesting that some of your readers commenting above seem to be more worried about how it affects them directly.

    Please have a read here:

    http://commetrics.com/articles/sheer-transparency/

    Thanks

    @ComMetrics

    ReplyReply

  36. Stumbling Over Chaos :: Super Fantastic Mega Bookity Linkity!
    Oct 20, 2009 @ 05:47:38

    [...] has been written about the new FTC disclosure rules for blogs, which go into effect December 1. [...]

  37. The Good, The Bad and The Unread » THE POND: The FTC and Other Quackery…
    Oct 22, 2009 @ 18:54:29

    [...] you want the full story and more opinions on all of this, go to Dear Author.  Jane has done extensive analysis, including actually talking to a guy at the FTC, and has [...]

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