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New FTC guidelines, and is it like a war against capitalism to "protect" consumers?

by AbdullahKaragoz
7 replies
In this link: FTC Publishes Final Guides Governing Endorsements, Testimonials

I have read something like this (4th paragraph):

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 ...

Is it mean that in when we are doing affiliate marketing, we must write something like this "hi, I recommend this product because I'm an affiliate of it, and I'm making money when someone purchases it" ?

Or when I'm selling a product with reselling rights that I get free, should I mention this "I get this product free from another source, but I'm trying to selling it to you for xx dollars. If you buy this product when you can get it free, you're just..." ?

I think what is the whole point of doing business if I'm forced to explain my customers exactly how I get my profit?
#capitalism #consumers #ftc #guidelines #protect #war
  • Profile picture of the author vansterdam420
    It is a double standard. Do they expect a salesman to disclose that he gets extra commission on the particular model he is pushing in any business? Why are the rules different online? The problem is that many people do not have common sense and they will take for fact anything they read online. Also consumers have a sense of entitlement where if anything is not satisfactory they feel they deserve a full refund. Consumers have been given all the power in retail sales to the point that it restricts business.
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    • Profile picture of the author KenThompson
      Originally Posted by vansterdam420 View Post

      It is a double standard. Do they expect a salesman to disclose that he gets extra commission on the particular model he is pushing in any business? Why are the rules different online?
      I'm wondering if you live in Amsterdam. Great city. My point is perhaps you're
      outside the US. So if that is the case, then you would not be expected to know
      some things about the laws in the US, etc. That's cool.

      If you read what was posted after your post, then you now know that things
      are not different online.

      I think the main reason the affiliate disclosure came about was some high profile
      cases involving deceptive practices such as flogs, fake blogs, and other cases
      in which people failed to read the finer print stating they were signing up for
      a continuity program. Also, some companies were definitely shady because they
      were dragging their feet with unsubscribing people from their continuity programs.

      A lot of complaints to the FTC, etc, and the typical result was the present situation.

      I also think it's obvious that you meant a commission at all and perhaps stating it
      as an 'extra commission' could be taken the wrong way. People like making blanket
      statements as fact when they are clearly expressing an assumption. But nothing
      new there.

      The problem is that many people do not have common sense and they will take for fact anything they read online.
      I agree with you on that one.

      Sometimes it's useful to look at some things in terms of motive rather than attempts
      to add value or make sincere contributions.


      Ken
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  • Profile picture of the author KenThompson
    Abdullah,

    Affiliate connection disclosure is not completely new here in the US. It's
    relatively new for online business but has been a requirement for a year
    or so. Not real sure about that.

    But the concept is not new, either, as TV and radio ads have had a requirement
    to mention if it is a paid endorsement for much longer. Seems it takes a
    while for everyone to get on the same page.

    I don't think it's a war on capitalism, though. Certain elements would be
    shooting themselves in the foot. (Not that that's anything new, either!)


    Ken
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  • Profile picture of the author myob
    This has been standard in most offline advertising, which is often portrayed as an "endorsement" or "review". The only change now is that it's applicable online. For example when bloggers act as if they are objectively reviewing a product, this FTC disclaimer is required if you are an affiliate or will obtain any compensation. If it's obvious you're a salesman ie ecommerce site, this disclaimer need not be posted. Just "fair advertising".
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  • Profile picture of the author LegionNate
    It is a double standard indeed. I'd like them to make mention that they make income of the backs of hard working tax payers for nothing more than creating useless laws geared toward making them feel relevant. Maybe throw it on their website as a disclaimer or something.

    The good news is at least they are protecting us from ourselves, since we are all too stupid to do it without them.
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    • Profile picture of the author Alexa Smith
      Banned
      Affiliate disclosure is a good thing, not a bad thing.

      I'm not in the US, and my sites aren't hosted in the US and I don't need to use them, but I use them voluntarily on all my affiliate sites both because I sell more with them than without them (people like honesty!), and because I feel much more honest about myself and my business, that way, as well.

      Here's a simple question for anyone who doesn't like using an affiliate disclaimer: if you're writing about some product on a blog in the form of a recommendation, giving a link to another off-site page where people can buy it, and earning a commission from that, and you stop 100 potential customers in the street and ask them "Would you like be told that I'm earning a commission from doing that?", how many of them do you think would say "yes": all 100, or just 99 of them? :confused:

      Lack of affiliate disclosure is for people who feel that they can make a profit only by deceiving others and concealing things from them.

      This issue is a no-brainer.

      Originally Posted by vansterdam420 View Post

      Do they expect a salesman to disclose that he gets extra commission on the particular model he is pushing in any business?
      It's not about extra commission, Vansterdam. It's about the fact that there's commission at all. That's why you have to declare that there is, not how much there is. :rolleyes:

      In the case of a salesman, people already know that (or can reasonably be assumed to understand that the person talking to them is incentivised, anyway). Online, that isn't so.

      Originally Posted by vansterdam420 View Post

      Why are the rules different online?
      Because online, clearly, the public can't reasonably be expected to know that from someone's blog. :rolleyes:
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  • Profile picture of the author incogneato
    In a time where government intervention is causing the collapse of economies all around the first world, and at a time where developing countries like China, Hong Kong, and India are becoming global super powers by adopting more capitalist ideas, it is truly amazing how here in the West we still allow our governments to regulate our lives away for a false sense of safety.
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