FTC: Freebies Must Be Disclosed

October 5, 2009 -

The Federal Trade Commission passed down a ruling today that could have some impact on the way video game reviews sites and bloggers do business.

The FTC, in a 4-0 ruling, said that "material connections" between advertisers and endorsers (such as payments or free products) "must be disclosed."

The hook seems to be the phrasing that "connections that consumers would not expect." Hardcore video game readers tend to be a jaded lot, and think that many sites are on the take for good reviews any way, whether they are or not. Most understand that sites get free games to review. But the general consumer may not know this.

The ruling also broadened the existing guidelines to cover bloggers:

[The new rules] 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 endorsement must disclose the material connections they share with the seller of the product or service.

The FTC did not rule that bloggers or companies must disclose any conflicts of interest.

There has always been a blurred line when sites accept advertising from game publishers and then review their products. Those same sites get free games and swag as part of review packages from publishers. Some sites do disclose this information, but most don't.

GamePolitics has contacted the FTC to see if these new rules extend to the video game arena. We'll update with a response when we get it.

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Comments

Re: FTC: Freebies Must Be Disclosed

The FTC may not have made a ruling on conflicts of interest presently, but I think this means it will not be far in coming.  What is the point of disclosing that you have received material goods from the folks you are reviewing now, if you are not required to disclose you've received material goods from the competitors of the folks you're reviewing now?  And who maybe you won't be reviewing so you don't have to disclose them?  There will be a small rash of such events, and then there will be an additional ruling.  That is how this works.

IMO games reviewers (like Tom Chick, who gets paid cash to write text for game 1 but reviews game 2 without thinking that worth bearing mention) have made this bed for themselves to lie in...so although insanejedi is right that this will ruin game reviewers, they've brought that ruin upon themselves through apparent and bad behaviour.

Re: FTC: Freebies Must Be Disclosed

Can't wait to see how this changes the way gaming sites like IGN and GAMESPOT does there reviews.

http://www.magicinkgaming.com/

Re: FTC: Freebies Must Be Disclosed

As a person who wants to be a Video Game "journalist" in the future, I think this is an anwful decision that will ruin everything or do absolutly nothing at all. Reviewers get copies of the game from publishers for free all the time, and they also get crazy packaged goods from the publishers containing weird little notes and gifts. None of the reviewers get money to do a review though, (unless your super shady ala Kayne and Lynch). But I dunno if "shwag" is considered a "payment". They usually do this because the nominal cost of shipping a game freely to them outweight the marketing potential of the coverage of that game, whether it be by review or preview, and most of the time there are not many strings attached. How this would affect or not affect them is that there maybe some reviews that must say at the end "we got this game for free by *blank*" and those reviews start to looks shady, or all reviews will end up with the "we got this game for free by *blank*" because that's how they get the game most of the time, and it will all generally get normalized and it means nothing to the readers anymore. Either that or this just involves cash as "payment" then any reviews that are "bought off" by the publishers effectively become distrusted and means nothing anymore.

Re: FTC: Freebies Must Be Disclosed

You mentioned swag....

Do things like promotional items and swag count, particularly if everyone is getting them?  For example, there's a Bioshock 2 promotion going on right now, where an old fashioned delivery boy has been dropping off telegrams and packages to people, in conjunction with an event hosted on beaches where people searched for messages in bottles.  Does something like that count in the things that need to be disclosed?

Re: FTC: Freebies Must Be Disclosed

That's one of the things I asked the FTC in an email I sent them. They returned my call, but asked me to email questions in. Not sure how long they will take to respond.

Re: FTC: Freebies Must Be Disclosed

No offense to the professionals, but I put more interest and stock in the consumer review over the professional review.  While looking at the professional is interesting, seeing those who play a game, shut down their computer, walk away, come back later, and play some more are a little more "realistic" from my viewpoint.  They are more likely to catch the casual bug than the professional reviewer who's looking for the more obvious.  Plus, the average professional reviewer tends to use one machine.  Maybe two.  But, looking at a large number of consumer reviews with many different systems, I get an idea of what a piece of software can or can't do.

 

Nightwng2000

NW2K Software

http://www.facebook.com/nightwing2000

Nightwng2000 is now admin to the group "Parents For Education, Not Legislation" on MySpace as http://groups.myspace.com/pfenl

Nightwng2000 NW2K Software http://www.facebook.com/nightwing2000 Nightwng2000 is now admin to the group "Parents For Education, Not Legislation" on MySpace as http://groups.myspace.com/pfenl

Re: FTC: Freebies Must Be Disclosed

The other fair question is: how comprehensive a definition of "bloggers" are they looking at here?  If I get a free sample of a toothpaste in the mail, and recommend it after using it, do I have do disclose that?

Hell, you could argue that -commenters- would be held accountable. Or message board posters. That starts falling into a very weird zone.

Re: FTC: Freebies Must Be Disclosed

Depends. Do you regularly review and recommend dental hygiene products? Did you receive said toothpaste with the distributor expecting a review of some kind? If not, then you would be safe not disclosing that.

I think the main goal of this ruling is to get those instances of a conflict of interest out in the open so that the consumers can make a more informed decision.

Back to the dental products reviewer. Let's say that you do review dental hygiene products. Colgate sends you a tube of their new toothpaste to test and review. Arm and Hammer sends you not only a tube of toothpaste but a tee-shirt and an invitation to a special preview party of their new line up of products.

The FTC ruling is targeting the second situation.

E. Zachary Knight
Oklahoma City Chapter of the ECA
http://www.theeca.com/chapters_oklahoma

Re: FTC: Freebies Must Be Disclosed

And that's the common-sense reading of it, I agree.  It just feels a lot less specific about bloggers than it did about "marketers".

Re: FTC: Freebies Must Be Disclosed

This goes beyond 'fair' and into the realm of 'biggie'.

The legal system is having serious headaches figuring out where journalism ends and people just talking begins.  Journalists have all sorts of rights (and responsiblities) that random people on the street corner do not have.. but now that anyone can self-publish and potentially be read by millions.. it is getting sticky.

 
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quiknkoldI'm 7 years old, and my cousin(Also 7, maybe 8 at this time) tells me has Battletoads. its Summer Vacation. We play and play and play until finally, We won coop. Those were the days.09/23/2014 - 5:29pm
quiknkoldlets take a moment to share some gaming memories, shall we?09/23/2014 - 5:28pm
MechaTama31I buy stuff off the eshop because it gives me the convenience of a flashcart without the guilt.09/23/2014 - 5:03pm
Montewell thanks for the info Eisen; try that the next time i need something off the eshop09/23/2014 - 3:54pm
james_fudgere: MP, i've sent tech support a note - thank you :)09/23/2014 - 3:14pm
IanCNah that wasnt directed at you Andrew :)09/23/2014 - 3:00pm
Papa MidnightRe: SIEGE 2014 Keynote: oh dear...09/23/2014 - 2:44pm
MaskedPixelanteDear GP, something called "doubleverify" is causing some nasty browser issues on my end. Probably one of your ads.09/23/2014 - 2:36pm
Andrew EisenOh hell no. No, it took Nintendo a dog's age just to get to the point its competitors have been at for a while! (And it's still not there yet, in a lot of respects.)09/23/2014 - 2:26pm
IanCSame as PSN handles it, fi you are trying to say only nintendo do that.09/23/2014 - 2:23pm
Andrew EisenYou have to try to purchase something first. Pick a game, hit purchase and if your wallet doesn't have enough to cover it, you'll be given an option to "add exact funds" or something like that.09/23/2014 - 2:05pm
MonteI have seen no option for that on my 3DS; anytime i want to add funds it only gives me the option to add in denominations of $10, 20, 50 or 10009/23/2014 - 2:03pm
IanCWhat Andrew Wilson said. PSN is the same when you make a purchase over a certain price (£5 in the UK)09/23/2014 - 2:02pm
Andrew EisenNeither eShop charges sales tax either. At least in California.09/23/2014 - 2:00pm
Andrew EisenBoth Wii U and 3DS eShops allow you to add funds in the exact amount of whatever's in your shopping cart. If your game is $39.99, you can add exactly $39.99.09/23/2014 - 1:57pm
Infophile@Matthew Wilson: As I understand it, any regulations to force tax online would also set up an easy database for these stores to use, minimizing overhead.09/23/2014 - 1:30pm
MonteReally, the eshop just does next to nothing to make buying digitally advantagous for the customer. Its nice to have the game on my 3DS, but i can get more for less buying a physical copy at retail. And that's not even counting buying used09/23/2014 - 1:18pm
MonteIanC, The Eshop wallet system only lets you add funds in set denominations and the tax makes sure you no longer have round numbers so you ALWAYS loose money. A $39.99 game for instance requires you to add $50 instead of just $4009/23/2014 - 1:13pm
Matthew Wilsonbut thats just it those sites, even the small ones, sell all over the country.09/23/2014 - 11:12am
 

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