I somehow missed this FTC enforcement action when it was released at the end of August. The FTC used the blogging disclosure guidelines that it released at the end of 2009 to slap the hands of an advertising firm that had it’s employee post reviews on iTunes without full disclosure.
From the NY Times article:
The Federal Trade Commission said on Thursday that a California marketing company had settled charges that it engaged in deceptive advertising by having its employees write and post positive reviews of clients’ games in the Apple iTunes Store, without disclosing that they were being paid to do so.
The charges were the first to be brought under a new set of guidelines for Internet endorsements that the agency introduced last year. The guidelines have often been described as rules for bloggers, but they also cover anyone writing reviews on Web sites or promoting products through Facebook or Twitter.
They are meant to impose on the Internet the same kind of truth-in-advertising principles that have long existed offline.
Last year, New York State settled a lawsuit against a Plastic Surgeon over false reviews but this is the first instance that I know of where the Federal Government has intervened in the review world. It is one thing to annoy the historically aggressive attorney generals of New York and another to put into motion the federal government looking at review spam. Clearly, this effort was targeted at ad agencies:
“We hope that this case will show advertisers that they have to be transparent in their practices and help guide other ad agencies,” said Stacey Ferguson, a lawyer in the advertising practices division of the trade commission’s Bureau of Consumer Protection.
That being said it should throw up a warning flag to any company doing the same. Too see an excellent example of the type of review spam that is becoming fairly common in Google Maps, see this article by Miriam Ellis. The article was written prior to the FTC ruling and Miriam asked the basic question of what would the FTC do in such situations. Now we have more than inkling of their direction.
Some other articles about the ruling:
MarketPlace: New FTC guidelines apply truth-in-advertising principles to online reviews
Citizen Media Law Project: FTC Flexes Blogger Rules Again