Blogs and review websites are now the first places people look when researching new products. On December 1, new US Fair Trade Commission rules will go into effect aimed at ensuring that the bloggers are being honest about their relationships with the companies they write about. (If you're wondering why I'm writing about US FTC rules on a Korean blog, see my note at the end of this post.)

It seems that the rules are intended to shore up confidence that online product reviews are written from a neutral perspective. They may achieve this goal without actually keeping bloggers honest. Before I go into the reasons why, some background.

The FTC rules require that bloggers reveal any “material connections” to companies or products they endorse. The previous rules were written when there was no internet, no blogs and no social media. And now people rely on online reviews when researching everything from TVs and mobile phones to everyday items like toothpaste.

The FTC is not trying to stop bloggers from writing about the products they buy, or even products they receive for free. If I write a blog about computers and Dell gives me a free one to try out, from December 1 onwards I’d be required to disclose that I didn’t pay for the computer. If I buy a computer with my own money and blog about how great it is, I’m not subject to the new FTC regulations.

So, how many bloggers are receiving free products to review without telling anyone? Is this really a problem? The truth is it’s hard to tell.

Bloggers survive based on their reputations and the internet has a long memory. If a blogger doesn’t disclose a relationship and his or her readers find out, the blogger’s reputation could be ruined forever. Because of this, most of the more popular bloggers, like journalists, already tell readers when they get a free product to test. Similarly, most companies hold these top bloggers to the same standards as journalists, asking that they return expensive products after a designated test period.

What’s hard to know is how often the writers at smaller blogs are given inexpensive products to test for free and don’t disclose this in their reviews. The ever-growing number of blogs makes these rules almost impossible to enforce and I think the FTC is aware of this. They’ve already clarified their position, stating that they will focus on education rather than enforcement. To me this says that they will make examples of high profile bloggers who take cash in return for positive posts.

The previous FTC rules were written when there was no internet, no blogs and no social media. But the new regulations are unenforceable on a large scale. Bloggers know this and the dishonest ones who are willing to take money or products in return for writing positive posts are unlikely to be dissuaded by a maximum fine of $11,000.

If anything, these rules may hurt consumers by creating a false sense that they can believe all of the product reviews they find online. (I think that usually they can, just not always.)

A more effective solution would be for bloggers to police themselves and set up a system that rewards people who play fair. A few prominent bloggers could create guidelines for others to follow. These could include disclosing when bloggers receive free products or otherwise providing a link to a picture or scan of the receipt.

Bloggers abiding by these guidelines would be able to place a seal of trust on their blogs. A central website could link to all the compliant blogs and also handle complaints. Bloggers who don’t want to go through the trouble of scanning receipts could still write about products but they wouldn’t get the extra reputation points and visibility that compliance provides.

A final note: While specific to the United States, these rules may also affect us here in Korea. Korea is one of the United States’ largest trading partners and Korean companies are increasingly talking to customers through blogs and social media.  LG and Samsung, for instance, have both reached out to customers in the United States through bloggers. (In the spirit of full disclosure, LG is one of my clients.)

 [My colleague in Australia, Dan Young, has a different take on the FTC’s new rules. You can read his assessment here: http://mumbrella.com.au/time-to-regulate-paid-aussie-blog-comment-and-to-penalise-the-offenders-10971]