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As to whether blogs with no ads are exempt, I haven't checked. Possibly so.

 

But as to the first part, the regulations do seem to me to apply to editorial content. As you can see from the second clip, the FTC is not discussing suing advertisers, but suing bloggers.

Then the FTC doesn't know what it says elsewhere:

 

"I’ve read that bloggers who don’t comply with the Guides can be fined $11,000? Is that true?

 

No. The press reports that said that were wrong. There is no fine for not complying with an FTC guide.

 

Are you monitoring bloggers?

 

We’re not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we’ll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers – just as it’s always been."

FTC

So the guidelines lack bite.

 

In some respects, they resemble the guidelines applied to investment firms with regard to stock recommends / shorts. There are a number of disclosures that market analysts are required to make, and these have made the markets a little more transparent. But, there's always a "wink" and the opportunity to front run (buy or sell ahead of the client's order or news release).

 

If a company (restaurant) wants to game the customer by wining and dining analysts (bloggers and reviewers), that's always possible. But over time, the number of gullible suckers (aka customers) will diminish.

 

Ultimately, the bad actors will disintegrate or become irrelevant. But, there is an obligation on the investor's (reader's) part to do a little homework and some analysis. Just reading a blogger / reviewer and going to a restaurant makes as much sense as reading a single analysis or article and then putting $20,000 into a particular stock. For me, at least.

 

(I was thinking about this a few minutes ago, as I read an article in today's Barron's by Erin Arvedlund. Back in 2002 she wrote an expose on Bernie Madoff in Barron's that basically said he was a fraud. She was hammered by all the authorities and investment experts. They explained why she had to be wrong. She was right, however. Just six years early...)

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We're not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we'll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers – just as it's always been."

FTC

 

Regardless of what their enforcement focus is, their guidelines recognize the ethical issue and hold bloggers responsible.

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We're not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we'll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers – just as it's always been."

FTC

 

Regardless of what their enforcement focus is, their guidelines recognize the ethical issue and hold bloggers responsible.

Good if that's the case. The guidelines that I managed to read before nodding off don't seem to address the restaurant owner-blogger dynamic which is slightly different than the traditional product trier/touter and advertiser relationship.

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As to whether blogs with no ads are exempt, I haven't checked. Possibly so.

 

But as to the first part, the regulations do seem to me to apply to editorial content. As you can see from the second clip, the FTC is not discussing suing advertisers, but suing bloggers.

Then the FTC doesn't know what it says elsewhere:

 

"I’ve read that bloggers who don’t comply with the Guides can be fined $11,000? Is that true?

 

No. The press reports that said that were wrong. There is no fine for not complying with an FTC guide.

 

Are you monitoring bloggers?

 

We’re not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we’ll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers – just as it’s always been."

FTC

 

Did you click on the link? As I said, it "talks about" suing bloggers - but very vaguely.

 

As Orik says, it's a weak guideline, and the mix of output from the FTC is hopelessly woolly. I too believe the guideline certainly applies to bloggers, but the FTC is studiously avoiding saying that any consequences will follow.

 

I think it covers forum posters and Chowhounders and Yelpers too, but of course there won't be enforcement.

 

The reason I raised it was just to indicate that the train has left the station as far as the moral argument is concerned. I think it would be very hard to find anyone now (who cared) who would agree that it's okay not to reveal comps when products are being reviewed. And regulation is, however slowly, moving to recognize that.

 

I think the problem with the non-disclosure position is this: it's easy to disclose comps, so why not just do so? The only answer I can think of is that there are so many it's hard to keep track of them; and readers are not going to be very sympathetic to that.

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As to whether blogs with no ads are exempt, I haven't checked. Possibly so.

 

But as to the first part, the regulations do seem to me to apply to editorial content. As you can see from the second clip, the FTC is not discussing suing advertisers, but suing bloggers.

Then the FTC doesn't know what it says elsewhere:

 

"I’ve read that bloggers who don’t comply with the Guides can be fined $11,000? Is that true?

 

No. The press reports that said that were wrong. There is no fine for not complying with an FTC guide.

 

Are you monitoring bloggers?

 

We’re not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we’ll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers – just as it’s always been."

FTC

 

Did you click on the link? As I said, it "talks about" suing bloggers - but very vaguely.

 

As Orik says, it's a weak guideline, and the mix of output from the FTC is hopelessly woolly. I too believe the guideline certainly applies to bloggers, but the FTC is studiously avoiding saying that any consequences will follow.

 

I think it covers forum posters and Chowhounders and Yelpers too, but of course there won't be enforcement.

 

The reason I raised it was just to indicate that the train has left the station as far as the moral argument is concerned. I think it would be very hard to find anyone now (who cared) who would agree that it's okay not to reveal comps when products are being reviewed. And regulation is, however slowly, moving to recognize that.

 

I think the problem with the non-disclosure position is this: it's easy to disclose comps, so why not just do so? The only answer I can think of is that there are so many it's hard to keep track of them; and readers are not going to be very sympathetic to that.

Yes, I did look at the link. All I was pointing out was that they are not going to sue bloggers rather advertisers if push comes to shove.

 

Of course I agree the ethics should apply to all.

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Here's an excerpt from an ftc press release on testimonial advertisements, bloggers, celebrity endorsements

 

FTC Publishes Final Guides Governing Endorsements, Testimonials

Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

 

... The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, 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. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims. ...

 

 

more

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Are comps taxable?

 

Why not?

 

Yes they are, in general. However, they have to reach the point of "material amounts" which is tough to define. Is a free cup of coffee given by a restaurant to cops on the overnight shift taxable? Not if it's of a de minimis amount. However, it may violate the ethics codes imposed by various departments. In NJ, it's specifically illegal to offer or accept gifts to cops.

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Are comps taxable?

 

Why not?

 

Yes they are, in general. However, they have to reach the point of "material amounts" which is tough to define. Is a free cup of coffee given by a restaurant to cops on the overnight shift taxable? Not if it's of a de minimis amount. However, it may violate the ethics codes imposed by various departments. In NJ, it's specifically illegal to offer or accept gifts to cops.

 

There's a difference between a commercial and a non-commercial transaction. If a restaurant is paying a blogger in food for an endorsement, and the blogger doesn't report that, the IRS probably has a very different view than if it gives a cop some free donuts. (even if in the course of the year the cop receives as many $s worth of donuts from various restaurants as the blogger does in free meals)

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Are comps taxable?

 

Why not?

 

Yes they are, in general. However, they have to reach the point of "material amounts" which is tough to define. Is a free cup of coffee given by a restaurant to cops on the overnight shift taxable? Not if it's of a de minimis amount. However, it may violate the ethics codes imposed by various departments. In NJ, it's specifically illegal to offer or accept gifts to cops.

 

There's a difference between a commercial and a non-commercial transaction. If a restaurant is paying a blogger in food for an endorsement, and the blogger doesn't report that, the IRS probably has a very different view than if it gives a cop some free donuts. (even if in the course of the year the cop receives as many $s worth of donuts from various restaurants as the blogger does in free meals)

 

I suspect either transaction would have to be sufficiently material for the IRS to be interested. The IRS will not send Elliott Ness and the boys to your house for not reporting a $60 meal. If, however, you're dining every Thursday at a place for months, they would undoubtedly have a different opinion. The restaurant would also have to justify the promotional expense as a business expense, and prove that they were getting sufficient business value for the thousands of dollars in free meals for it to be deductible.

 

The cops and donuts issue, in NJ at least, is a matter of avoiding the appearance of corruption and shakedowns. One diner near us used to offer free coffee to cops between midnight and six am. There were always police cars around, from several jurisdictions and the state police. It probably made the patrons and employees feel very safe, but they were required to end the free deal. Now, you can purchase an "unlimited coffee" card for $2 a month, good only between midnight and six am. It's not advertised, so you have to ask about it.

 

Still lots of police cars around.

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