FTC To Monitor Blogs For Paid Claims & Reviews 129
PL/SQL Guy writes "Many bloggers have accepted perks such as free laptops, trips to Europe, $500 gift cards or even thousands of dollars for a 200-word post. Bloggers vary in how they disclose such freebies, if they do so at all. But now the Federal Trade Commission is paying attention. New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest. Bloggers complain that with FTC oversight, they'd be too worried about innocent posts getting them in trouble, because the common practice of posting a graphical ad or a link to an online retailer — and possibly getting commissions for any sales from it — would be enough to trigger oversight."
Yes, they do (Score:5, Informative)
There are very stiff penalties in the financial world for not disclosing conflicts. When CNBC has a speaker or guest, you'll notice they put up a disclosure screen that shows information on whether the speaker has any conflicts with the company he is discussing. It's not perfect but it is a step in the right direction. It wasn't always like this....back in the day, there were serious and glaring conflicts that were known but never discussed outside of those "in the know".
One that comes to mind is a stock analyst who's employer does investment banking for the company the analyst is writing about. ie: Citibank does invesment banking business with Wal-mart. The Citibank analyst who covers Wal-mart has a conflict because if he pans Wal-mart, they take their investment banking business elsewhere. So there is a strong incentive for the analyst to write glowing reports, despite whether or not they are true. That is precisely what Spitzer put a stop to. Henry Blodget [wikipedia.org] was the worst offender but he was not alone.