Great News: The FTC Finally Requires Payment-For-Review Disclosures

Jesse Hollington forwarded over a link and quick comments on something that we can only describe as “great news” for those of us who care about the integrity of product reviews generally, and on the Internet specifically. As I’m busy working on the 2010 Buyers’ Guide, I wanted to just post Jesse’s comments and add one or two of my own for the time being.

The link: FTC: Bloggers Must Disclose Payments For Reviews.

The summary: Effective December 1, 2009, the Federal Trade Commission requires bloggers to clearly note the freebies or payments they’ve received for reviewing companies’ products.

Jesse’s comments: “I realize it doesn’t affect us, and the fact that it doesn’t is in many ways a testament to the quality of our organization. It will be interesting to see how it affects certain other sites out there, however.”

My comments: Jesse’s correct. First, iLounge isn’t a blog. Second, we’ve never taken a payment or a freebie in exchange for writing a review. Third, we are thrilled to see the FTC working on behalf of consumers to create transparency in product coverage, which has been plagued by tons of faked/compensated reviews over the last five or so years.

iLounge has a unique operating structure that was designed to avoid the exact sorts of problems that the FTC is focusing on. Our publisher owns iLounge outright, but does not write product reviews; by contrast, our editors and reviewers have no ownership stake in the company or site. The editorial side of iLounge covers whatever is purchased by or sent to iLounge that we feel is worthy of coverage, but as editors, we do not own anything that is acquired by the organization. Additionally, iLounge has never sold items received for coverage, or traded them for other items. iLounge even purchases all the iPods and iPhones we review—a substantial expense given how many we buy every year (10 iPod nanos? Sure, why not?), and a major differentiator from publications that receive items directly from Apple.

As you may or may not already know, this is different from many publications—online and print—where the person who owns the publication is also reviewing products. Some publications explicitly expect payments in exchange for coverage. Others only review products that they are sent, and then with the expectation that they will be able to keep or sell the items afterwards for cash. In our experience, these practices lead to obvious reviewer biases in favor of that which is heavily compensated for, or merely expensive; this is part of the reason you see so many “sure, it’s overpriced, but I love it!” reviews out there. Our long-standing distaste for compensated editorial—essentially, “advertorial”—is why we do not work this way.

So the FTC’s decision to require reviewer compensation disclosures is very, very good news for consumers as a whole. We applaud it, and want you to rest assured that our reviews are not and have never been paid for by the companies we cover. That’s a point of pride around here, and as Jesse says, it will be interesting to see how others address (or fail to address) the topic.

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