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FTC outlaws firms paying for favorable blog posts

December 13, 2006

From Duncan Riley, the practice of sellers of products and services paying bloggers to post favorably about their goods without disclosing their relationship is not only unethical, but illegal.

The Washington Post reports that the Federal Trade Commission ruled Monday 11 December that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.

The post article made clear that the FTC’s ruling applied to blogs and their publishers.

Take note of a few portions of the article cited by Duncan.

Word-of-mouth advertising is already covered under existing FTC regulations that govern commercial endorsements. What the FTC sought to do yesterday in its staff opinion was to note that such marketing could be deceptive if consumers were more likely to trust the product’s endorser ‘based on their assumed independence from the marketer.’……The FTC said it would investigate cases where there is a relationship between the endorser of a product and the seller that is not disclosed and could affect the endorsement. The FTC staff said it would go after violators on a case-by-case basis.

And as Duncan correctly notes, both the sellers and the blog publishers would be deemed violators.

This should not have a big impact on law firms so long as they are smart. Most law firm blogs are clearly published by the respective lawyer(s) and the content is informational in nature, not touting some service or product. In addition, where someone else is posting content for the lawyer, ie, news or legal updates, it is not something that would be viewed as deceiving potential clients.

Where law firms would get in trouble is where blog posts are made on a blog, other blog than the law firm’s blog, commenting favorably about the lawyer’s services where such post was orchestrated through a paid PR campaign and not disclosed. I have not seen that yet. But with some of the tasteless marketing lawyers and some of their marketing companies have done, I guess the day will come.

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