Ed has a link to the proposed new FTC guidelines on bloggers and compensation (effective December 1, 2009) and also a revealing interview with Richard Cleland of the Bureau of Consumer Protection. The whole post is a must read and part of the larger conversation on the FTC's decisions that pretty much set twitter on fire today. Here's some of the relevant bits for online book reviewers:
"The primary situation is where there's a link to the sponsoring seller and the blogger," said Cleland. And if a blogger repeatedly reviewed similar products (say, books or smartphones), then the FTC would raise an eyebrow if the blogger either held onto the product or there was any link to an advertisement.
What was the best way to dispense with products (including books)?
"You can return it," said Cleland. "You review it and return it. I'm not sure that type of situation would be compensation."
If, however, you held onto the unit, then Cleland insisted that it could serve as "compensation." You could after all sell the product on the streets.
Do you understand that? If you receive a book (or ARC) from a publisher and review it, then it must be returned to the publisher. You must not only return it but also retain proof that the book was returned. You must box it up, send it to Random House, Harper Collins, FSG, etc and you must ship it (I assume) return receipt requested. Then you must keep files of these receipts for what - five years? seven years? forever?
Now if you do not review the book then I assume you do not have to return it. However you would have to retain proof that the book was not reviewed. I'm not sure how to prove nonreview of a book but there you go. I assume also that you must not mention the book in any way on your blog that might constitute a recommendation. I'm going to assume you must also not verbally recommend the book to anyone. If you do this, then you would have to return the book because even though you did not formally review it, you have still recommended it and by keeping the book you retain compensation for that recommendation.
And if you send those nonrequested nonreviewed books to your mother or brother or niece or nephew as gifts? Have you, by sending them, recommended the books to others? And if they then recommend the books to others are you responsible for those recommendations even if you did not recommend the books to begin with?
Are you still with me?
In many ways, this all seems laughable. As Cleland states himself it hard to imagine how you could handle the mechanics of this rule: "I think that as we get more specific examples, ultimately we hope to put out some business guidance on specific examples. From an enforcement standpoint, there are hundreds of thousands of bloggers. Our goal is to the extent that we can educate on these issues. Looking at individual bloggers is not going to be an effective enforcement model." However, it does not matter if one guy at the FTC says it is hard to enforce because once the rule is in place, any guy at the FTC can enforce it. And that means that you need to disclose the source of every book you review online and you need to return every book you review online.
That's what he said: "You can return it," said Cleland. "You review it and return it. I'm not sure that type of situation would be compensation."
For everyone who thinks this is insanity central and a joke, I ask you what you will do when the FTC audits you based on the number of reviews you have written. And if you can not prove you have mailed all of those books back, expect the IRS to then audit you based on the compensation you clearly received (even though the value of an ARC is impossible to judge on a general basis). You will be fined by the FTC and then by the IRS. It will cost you money to review online - it will cost you a lot of money.
How do I feel about this? Simple. Reviewing books from publishers is going to be too expensive, both in time and money, for me. I will stop doing it. I will still talk about books I purchase or check out from the library but honestly maintaining my column? I'm not sure how I could do it. More importantly, I'm not sure I would want to do it at the risk of getting sucked into some audit/investigation vortex with multiple government agencies. Think I'm over reacting? Have you ever been audited? I've dealt with the FAA on aviation issues many many many times. There are stories I could tell you that are not to be believed. If the rule exists, it must be followed, regardless of the unreasonableness of the rule.
That is just how it is.
So authors, most of whom are being urged to market their books on their own these days, I wonder how you would cope in a blogosphere that is strongly hampered in its ability to review your new book? Do you understand what this will mean for you and the buzz buildup for your latest release? Are there enough print reviewers out there these days to get people excited about your book?
And hey - whose going to track where all those amazon reviewers get their books from? And what if you don't formally review a book but comment on other blogs about how much you love it? That's a review isn't it? Will they track you down and demand proof you returned that book?
Is it worth it to talk about books anywhere - even if you buy them yourself? You will have to retain proof of every book purchase for every book you write about. And yet we know you can't do that - not from used bookstores and garage sales. You can't prove that a lot of books were bought by you (and what about gifts?). So will they just audit the publishers to find out who they sent the books to for review and then go after you from there? And what if you received two or three or four copies of the same book? I have - and it's hard to stop. Do you have to return every single one? And how do you prove that?
I understand the FTC wanting to go after bloggers who post product endorsements without stating they do. So post on your site where the stuff comes from and be done with it. That simple. But return these items? Claim a case of half eaten Fritos on your taxes or return them? Is that what we are doing here - and are we really ready (and equipped) to do this?
Welcome to regulation of the internet frontier folks. And if this rule goes through, expect a lot more quiet in the lit blogosphere where even linking to an author's site - where the author then links to sites where their books can be purchased - could constitute advertising. Think I'm crazy? Then you do it, and let us all know how it works out when you get that letter from the FTC.
We need to push back against this, and hard. Any ideas?