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10.05.2009

Wine Blogs are Now* Regulated by the FTC

This morning the Federal Trade Commission announced a new set of rules specifically targeting blogs like this one. In short, the Federal Government says that *as of December 1st, 2009, all sample products sent to bloggers must be disclosed in any coverage of those products. Here's the press release about the rules, here's the full text of the current rules, and here's the document that outlines the new changes that will be added to cover bloggers and other New Media. (PDF)

While the execution of these rules was slightly flawed, leaving much ambiguity and unanswered questions, rules like this aren't necessarily a bad idea. The devil is in the details, but in general, I am supportive of this move.

If you'll forgive a little blogger navel gazing, I'd like to explain why.

First and foremost I hope this will reduce the steady stream of e-mails that I get offering to pay me in order to get me to write about some or another product. These are never wineries, but all sorts of different wine related products, from aerating decanter mechanisms to wine tote bags to every method of opening a wine bottle you could possibly think of.

Beyond eliminating some noise from my inbox, I think these rules are an easy way of dismissing the largely baseless claims out there that somehow wine bloggers are mostly paid shills, who subsist on free samples, paid blogging, and advertising from wineries. Such accusations are almost entirely bullshit, but like any slur they're motivated by some grain of truth. There probably are some bad apples in the blogging world that may see this ruling and the prospect of a five figure fine as an excuse to clean up their acts. But more so, this is an opportunity to point out that as of December of this year, wine bloggers will be more strictly regulated for conflicts of interest than any mainstream wine publication (these FTC guidelines don't apply to "traditional media outlets" for some bizarre reason).

These rules, of course, are designed to protect consumers from stumbling across reviews on the Internet and thinking they are fair and unbiased, when, in fact, they may have been written by someone who was paid to write them, who got free stuff to write them, or worst of all, they may have been written by the company itself. (The fact that there exist magazines where wineries can pay to have nice editorials written about them, apparently is not an issue for the FTC). The rationale behind this is quite logical, and it's the reason I have always disclosed when I am writing about wine that I received as a free sample.

In short, transparency is a good idea.

It's probably unlikely that the FTC will go after individual bloggers for violations of these guidelines, even though they now have the regulations to do so. Instead, they are much more likely to use them to go after the corporations who they deem egregious offenders of these rules.

This will likely cause many companies to think twice about sending out free samples, especially if they think they might be held to account when some random blogger they send a sample to forgets (or refuses) to disclose the fact that they got it as a sample. I know I've got a lot of people in the wine business as readers here, and by virtue of self selection you probably have sent samples to bloggers before. I'm interested to know if you're going to change anything about your samples policy in the future?

Enforcement may be difficult on either side of the freebie equation because the guidelines don't really specify what constitutes effective disclosure. For instance, it's not clear whether its enough to simply say somewhere on the site that occasionally free sample products are reviewed. And how the hell can you disclose a freebie in 140 characters? Yes, these regulations cover Twitter as well.

So what do you readers think of all this? None of the government's business? Just what the blogosphere needed? I'm curious.

Comments (57)

Glenn wrote:
10.05.09 at 11:01 PM

I think this is a very well written and thought out post. My concern about this issue is that bloggers aren't given the same
'rights as journalists when protecting their sources, but have to discuss biases. The government can't pick and choose how to regulate this evolving medium.

Jack Everitt wrote:
10.05.09 at 11:57 PM

Shouldn't movies, newspapers and magazines have to do the same thing, as a prominently?

Benito wrote:
10.06.09 at 12:08 AM

This is annoying. If I'm forced to declare a sample when I've received it, fine, but if I ever have to keep records and shipping labels and file paperwork disclosing specific relationships, it's game over.

Here's an interesting and completely true example... I've currently got a bottle sitting on the table right in front of me. It was a gift from a fellow blogger here in town. Blogger F gave it to me because I invited him over for lunch. Is this a gift between friends or are we both considered media in this transaction?

Now, Blogger F got the bottle as a free sample from Blogger T, who is also a wine importer in New York.

If someone gets in trouble, is it me? Blogger F? Blogger T? The American import company? Or the Italian winery? Does the bottle remain in limbo until I write about it? If I purchase the identical bottle from a retail store and pour a bit of each into the same glass, have I created a paradox?

10.06.09 at 5:54 AM

Benito,

I think all your questions are moot. The ruling says nothing about receiving or giving; it's about not disclosing. Once you disclose, I presume, you are off whatever hook there is no matter who gave you the wine.

PS: you couldn't have created a paradox, some other winery has already done that, only misspelled the word...

Taw99 wrote:
10.06.09 at 6:36 AM

I agree with Jack Everitt. If they are going to require disclosure for bloggers they should do the smae for other media.

taw

1WineDude wrote:
10.06.09 at 6:38 AM

I hereby declare this comment to be my official declaration that I receive wine and wine-product samples. According to this analysis of the reg., I'm now in compliance! WOOT!

Jerry Krueger wrote:
10.06.09 at 6:51 AM

I would like to know what caused this action to be taken. Was it in response to consumer complaints? Anyone know?

Eric wrote:
10.06.09 at 7:40 AM

My big issue with this is singling out "new" media outlets and giving traditional media a pass. That means a food critic writing for the local fishwrap can accept all the freebies they want in exchange for glowing reviews without a word of disclosure.

That's a fatal flaw and my guess is it'll result in a court challenge resulting in the law being stricken down.

10.06.09 at 7:43 AM

We need to encourage this medium not further regulate the free press. Soon even bloggers will need regulatory and compliance services to manage their government interface. How crazy is that?

Kathy wrote:
10.06.09 at 8:45 AM

Every print, radio, and TV media I've ever worked for had an editorial policy guiding product/meal/travel etc. acceptance and disclosure. Reporters are fired for violating the policy.
So, I do take exception to comments/assumption that journalists are operating freely outside this "onerous" law. The First Amendment, FOIA, defamation, libel, zillions of lawsuits and court rulings, and a host of other laws guide and restrict what journalists do, but do not apply to what publishers do when operating on the advertising side of the firewall.
A blogger (normally one person) is a publisher where there is no firewall between editorial and advertising. I did a story in January about wine and Millennials and I spoke with a few people whose primary blog focus was not wine but who were paid to write about wine to create viral PR. (Is this the end of viral PR?)
So, where did the FTC rule come from? Actually, celebrity endorsements where the celebrity doesn't use the product and ads for medicine and "cures" with supposed "real people testimonials" (not identified as actors) is the spark for this. This is hand-in-glove with the DOJ, SEC, FDA crack down on pharmaceutical companies and hospitals, doctors, researchers...and fraud and bribes.
For more on the FTC ruling, take a look at the comments filed after the proposed rule was posted in the Federal Register.
So wine bloggers, in fact most bloggers, are not big fish in the FTC pond. But companies may feel the pinch because, First Amendment, they cannot make you disclose in print where you got the wine. (Well, if they make you sign something and then you renege on the agreement...then there will be nasty letters from lawyers and lawsuits and it takes the fun out of a free bottle of wine).
And Alder, for whom I have a lot of respect, seems to agree: keeping the water clean when you are in the pool is not a bad idea.

Alder wrote:
10.06.09 at 9:18 AM

Kathy,

Thanks for the thoughtful comments. I do have to take a technical exception to your comments. Having an editorial policy is NOT the same as being covered by Federal Trade Commission rules. In point of fact the rules that the FTC has drafted for disclosure SPECIFICALLY suggest that they do not, should not, and need not cover "traditional media outlets." This is silly. Sure there are plenty of journalism outlets that have a strict firewall between editorial and news. And then there are publications like I linked to above. $13,000 gets you a nice editorial about your product in Anthondy Dias Blue's The Tasting Journal Magazine, with no sign that it is a paid advertising gig rather than an honest editorial about your product, and mixed in with plenty of other honest editorial about wine and spirits.

If the idea that such hidden paid endorsment is damaging to consumers, why does the FTC not simply make it a rule that applies to all media outlets regardless of size? The assumption that just because one media outlet is an "organization" vs. an individual (which by the way is not a clear definition of a blog, there are plenty of blogs that have more editorial structure than some traditional media outlets) that somehow they can be trusted to self police is ridiculous.

Anyhow. The point of my article obviously was not to complain about different treatment of bloggers vs. traditional media, as I know you are aware.

Jeff wrote:
10.06.09 at 9:40 AM

I haven't ever received a free sample as of yet...but...this is still absurdly disingenuous and ludicrous on the government's part, and it's not going to make much difference. Let's be honest about the fact that the government has bigger fish to fry (er, they should, at least), and that this is a ridiculous distraction. How on earth are they going to regulate all the content on the internet, and why would they bother? How many rubes are honestly that deceived by the content on the internet? If you're that easily deceived, I would posit that you might also be into Lyndon LaRouche, or 9-11 Conspiracy theories, and we should probably send you out to pasture anyways.

Benito wrote:
10.06.09 at 9:53 AM

I guess I was wondering, in that situation, whom I would disclose as the provider of the sample? As you say, it's not clear yet how much information will be required and what precise form it will take. I always get curious about the odd cases.

How would this apply to a wine tasting? A local shop offers a $5 afternoon wine tasting, but if you purchase a bottle right then the tasting fee is waived, making it a free tasting. So if I tasted, left, and wrote about it, I would be fine, but if I purchased a bottle would I then have to disclose the "free tasting"?

I'm not going to lose any sleep over this, but it's still annoying. I've had to fill out disclosure paperwork in real life for gifts from clients, which is fine--my boss and my company need to know that I'm not being bribed or putting them in a troublesome legal position. But in that case there is a department to assist with the disclosure and maintain the records. A solitary blogger not making any money from the activity is in a little different position.

Herb wrote:
10.06.09 at 12:03 PM

darn: no freebies for directories, though.

Hey- enjoy what you get.

Tom Johnson wrote:
10.06.09 at 12:10 PM

The thing is, media that take paid editorial content lose their credibility -- and audience -- quickly. About ten years ago there was a spate of syndicated TV magazine shows that claimed to be business reporting but were in fact paid advertising. People caught-on fast, because people are remarkably sophisticated about media. Audiences know how to tune out marketing bullshit.

The strength of blogs is their authenticity. The blogs that sacrifice that won't be around long enough for the regulators to get at them.

Dylan wrote:
10.06.09 at 5:11 PM

More than an issue of "bad bloggers" this is more about abuses by companies posing as regular, "average joe/jane blogger," but, in fact, selling their product in an underhanded way. It's eliminating the online equivalent of what a con man would do in real life--build false trust and use it for their gain.

10.07.09 at 11:19 AM

A couple of comments--

As a member of traditional media, who got there from being an enthusiastic amateur, I am still a consumer of all kinds of information, and I see nothing wrong with transparency at all levels of endeavor and every part of media--including wine media.

Indeed, I think the wine media, as big and varied as it is, would benefit from a code of conduct as regards transparency in samples, travels, etc. And frankly, if we in the wine media came up with that kind of code (voluntarily, of course), those of us who followed it would be following a far more open and fair set of standards than the FTC will ever think up.

10.10.09 at 6:37 AM

The traditional Portuguese media are not shy in pressurizing wineries to advertise even in the same edition which rates their wines, or writes articles about the winery. These wineries ought to realize that such advertisements can only serve to put into doubt the objectivity of the rating in the eyes of the reader. Due to this potential conflict, we established a 'strictly no advertising' policy in the very beginning.

Anthony wrote:
10.12.09 at 1:16 AM

Personally I think this decision is crazy not just for wine bloggers but for most people who blog in general. Someone (can't find the quote) has made the observation that blogs are not even "media" - they are conversations. And what defines a "blog" anyway? Most are still one person affairs - but then you have giant corporations running blogs too... And I have issues also with the fact that GE can own a TV station etc. but if I was to receive a bottle of wine (hasn't happened yet) I would have to disclose that! Give me a break -

Mark wrote:
10.16.09 at 3:13 PM

It's going to be interesting to see how this affects celeb endorsements more then anything else, because I think they get paid for saying pretty much everything.

Damien wrote:
10.18.09 at 8:08 AM

Hmmmm, interesting.

This gets me to the bigger question of what purpose these blogs serve the wine sector. So, without further ado, I'd be more interested in your thoughts on what makes a good wine blog? Thinking about the fact that regulators are trying to take the democratisation away from the democracy, what does the wine-drinking public want/demand from their wines bloggers?

Wine for thought...

Alder wrote:
10.18.09 at 10:29 AM

Damien,

Thanks for the comments. That's an impossible question to answer except to say "writing that people want to read"

There is no one "wine drinking public" there are thousands of segments within the public, and each may want something different from their wine bloggers.

Scott Haas wrote:
12.03.09 at 4:05 AM

I think they are going after all offenders: individuals and the companies that send them free stuff and give them free travel. It's not a few bad apples: it's systemic, how the system works. So if you take or do something free, you do so knowing that a consequence could be a financial penalty imposed by federal law. Wine is one area of extraordinary practice with companies indeed shilling as typical practice..

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Required Reading for Wine Lovers

The Oxford Companion to Wine by Jancis Robinson The Taste of Wine by Emile Peynaud Adventures on the Wine Route by Kermit Lynch Love By the Glass by Dorothy Gaiter & John Brecher Noble Rot by William Echikson The Science of Wine by Jamie Goode The Judgement of Paris by George Taber The Wine Bible by Karen MacNeil The Botanist and the Vintner by Christy Campbell The Emperor of Wine by Elin McCoy The World Atlas of Wine by Hugh Johnson The World's Greatest Wine Estates by Robert M. Parker, Jr.