The FTC made public its first investigation into a company's relationship with bloggers since issuing new guidelines last year requiring bloggers to clearly disclose any "material connection" to an advertiser, including payments for an endorsement or free product. On April 20, 2010, the FTC notified Ann Taylor in a letter that it had investigated the posting of content by bloggers who attended a preview of the company's Summer 2010 collection on January 26, 2010. The invitation sent to bloggers for the preview offered a "special gift," and promised that those posting coverage from the event within 24 hours would be entered into a "mystery gift-card drawing," where they could win between $50 and $500.
The FTC stated in the letter that it was concerned that bloggers who attended the preview and posted blog content about it failed to disclose that they received gifts for posting the content in violation of Section 5 of the FTC Act, which requires the disclosure of a material connection between an advertiser and an endorser when such a relationship is not otherwise apparent from the context of the communication that contains the endorsement. The FTC stated that it had determined not to recommend enforcement action at this time because of several factors, including that this was this was the first and only event like this conducted by the company, only a very small number of bloggers actually posted content about the preview, and several of the bloggers disclosed that the company had provided them gifts at the preview.
The FTC specifically highlighted that a key factor in its determination not to recommend enforcement action was that the advertiser adopted a written policy in February 2010 stating that it would not issue any gift to any blogger without first telling the blogger that the blogger must disclose the gift in his or her blog. The FTC also specifically stated that just having a written policy is not enough, and that it expects companies to both honor their written policies and monitor bloggers' compliance with their obligation to disclose gifts they receive.
Tip: Companies that give out gifts and other consideration to the general public should have written policies in place specifying that the recipient must be told that if he or she then blogs about the company or its products, that the gift must be disclosed. Furthermore, companies should monitor to make sure that both their employees and the recipients comply with the policy.