Disclosure and why it’s important

Images_of_Money

Updated 13 November2013

PLEASE NOTE that this page is provided purely for information purposes and comprises quotes from relevant legislation rather than any interpretation of the law.  We are not lawyers and nothing on this page should be construed as constituting legal advice.  If you are in any doubt as to your legal position, always consult a qualified solicitor.

THE ONE-LINE SUMMARY

If a company pays you in some way to write about them or their product (whether this is by means of a cash payment; free or discounted products; vouchers for their or another company’s products; free meals; free travel; or sales commission) you are under a legal obligation to make a statement disclosing this fact clearly somewhere in your blog post.

THE BACKGROUND

Back in 2009, the US Federal trade Commission decided that, in order to protect the public, those who are compensated in some way to endorse products in the media should be required to disclose their connection with or compensation from said brand.  As a result, they issued new guidelines requiring that people who blog, tweet or use Facebook to post opinions about consumer products or services had to disclose their relationship to the product that they were talking about – whether this be as a friend of the owner, as the recipient of a free sample, or as the recipient of payment in return for a mention.

THE UK POSITION

In the UK, the Committee of Advertising Practice (CAP) code which regulates how companies may advertise, has for a long time covered e-mail marketing as well as traditional paid-for online advertising such as pop-ups and banners.  But in March 2011, the CAP code was extended to the effect that the Advertising Standards Authority (ASA) now also regulates advertisers’ marketing communications on their own websites and in other non-paid-for space online under their control – see http://www.asa.org.uk/Media-Centre/2010/~/media/Files/CAP/Codes/CAP%20Digital%20Remit%20Extension.ashx – the relevant paragraph is defining what is covered is 3.3 which reads as follows (bold text is ours, not in the legislation):

3.3     Advertisements and other marketing communications by or from companies, organisations or sole traders on their own websites, or in other non-paid-for space online under their control, that are directly connected with the supply or transfer of goods, services, opportunities and gifts, or which consist of direct solicitations of donations as part of their own fund-raising activities.

In addition, it is also important to note the excerpts below from The Consumer Protection from Unfair Trading Regulation 2008, No. 1277 Part 5 Supplementary:

Regulation 3(1) –  Unfair commercial practices are prohibited.

Regulation 3(4)(d) – A commercial practice is unfair if it is listed in Schedule 1.

SCHEDULE 1

Commercial practices which are in all circumstances considered unfair:

11. Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial)

22.  Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

It seems that the ASA’s intention is to ensure that consumers are not misled by thinking that what they are reading is an unbiased review of a product, but that in fact it was paid for or sponsored by the company concerned. The ASA has indicated that they are actively looking for violations, rather than waiting for them to be reported.  If found to be in contravention of these regulations, the penalty is a fine, up to 2 years imprisonment or possibly both.

UPDATE – 13 NOVEMBER 2013

In response to queries from concerned bloggers about how to deal with and disclose freebies, product samples and sponsored posts, the ASA has today issued informal guidance to bloggers on how to approach this increasingly thorny issue.  The ASA acknowledging that bloggers have full editorial control over the content of their sites and emphasised that it is not the ASA’s role to interfere in this. However, they remind bloggers that for bloggers to falsely present themselves as consumers (i.e. giving a view that appears to be opinion but that is actually paid for) is a misleading practice and one that is prohibited under consumer protection laws.

The ASA confirms that it is perfectly legitimate for a blogger to accept payment in return for promoting something in their blog, and that the ASA rules do not prohibit PR companies sending free gifts or samples to bloggers in the hope of receiving a positive review. But if a company is paying a blogger to say something positive then it becomes an advertisement and they must disclose it by marking the post as an “advertisement”, “advertorial” or “sponsored content”

It would appear that the ASA has limited their demand for disclosure to posts where money or vouchers have changed hands (i.e. a sponsored post in the narrowest sense).  This means that a blog about a free sample is not technically a paid for post in terms of today’s ASA guidance, but there is no guarantee that this might not change in future.  

WHAT SHOULD BLOGGERS DO?

The legal (and ethical!)  solution is for bloggers to be scrupulous about disclosing any sort of freebies or compensation that they have received in exchange for a post (or to disclose if they have some sort of relationship with the company that they are reviewing).

There is no magic to the wording of such a disclosure – just as long as it is clearly visible and written in plain English, and that you are consistent in disclosing.  Obviously, the wording of the disclosure will change according to what relationship you are disclosing, but here are some template examples – you can also add a line about all opinions being your own:

  • Disclosing a cash sponsored post: “This post was sponsored / paid for by company [insert name]“

  • Disclosing sponsored product: “I received x products or services mentioned above for free from [insert company name] for the purposes of writing this review.  However, I would only recommend products or services I use personally and believe will be good for my readers.”

  • Disclosing a review copy of a book: “I received this book free from [insert name] Publishers. I was not required to write a positive review and the opinions I have expressed are my own.”

  • Disclosing a sponsored event/meal/trip: “I attended this event/restaurant/trip for free as a guest of [insert company name]. I was not required to write a positive review and the opinions I have expressed are my own.”

  • Disclosing affiliate links: “Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. However, I only recommend products or services I use personally and believe will be good for my readers.”

  • Disclosing employee/shareholder status: “I am an employee of Yummy Yoghurt, the company producing the yoghurt mentioned in this post.  However, I received no remuneration to write this post and I only recommend books products that I personally use and believe will be good for my readers.”

  • Disclosing no connection/sponsorship: ” I have not received any compensation for writing this post. I have no material connection to the brands, products, or services that I have mentioned in this post.”

BEWARE OF UNSCRUPULOUS PR AGENCIES!

I have on occasion been approached by a PR agency, been offered cash in exchange for a post… and then also been told “we require that you not mention in any way that this post is sponsored”. As always, I respond and say that this is not legal, quoting the relevant regulations and explaining that I am not going to run the risk of prosecution and reputational damage for the sake of a few pounds.  Usually this is enough to discourage them, but I have experienced and heard of some PR agencies who have come back and argued that I misunderstand the law, or that “bloggers are exempt from these rules because they have freedom of speech” (!!).  Arm yourself with knowledge of what the law actually says and be very very wary of PR agencies telling you “don’t worry, of course it is legal”.  If remuneration changes hands, cash or otherwise you always need to make a disclosure!

Written by Jeanne Horak-Druiff

Photo: Flickr/Images_of_Money

Post By Jeanne Horak-Druiff (5 Posts)

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