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If there were any doubt about the Federal Trade Commission making good on its promise to crack down on blogger freebies, it has been laid to rest this week. The group just completed an investigation of retailer Ann Taylor. They won't be asking for any reparations from the company, but that's only because Ann Taylor cooperated and promised not to offer any more $10 gift cards to bloggers.
For bloggers thinking they would remain outside the FTC's purview, this case could serve as a warning that all sponsorships are under scrutiny.
Earlier this year, Ann Taylor held a preview event for its new clothing line. The company invited bloggers and promised them gift cards valued between $10 and $500, after sending the retailer the posts they were planning to publish. The effort came in direct violation of the FTC's new disclosure rules.
In February, I wrote that Ann Taylor might be getting a visit from the FTC. Well, now they've come and gone. According to a letter from Mary Engle, the FTC's associate director of advertising practices, to Ann Taylor's legal representatives:
"We were concerned that bloggers who attended a preview on January 26, 2010 failed to disclose that they received gifts for posting blog content about that event."
Apparently, the FTC thinks that it is Ann Taylor's responsibility to make sure that each and every blogger disclosed the gift cards. However, the organization will not be fining Ann Taylor. According to AdAge:
"The FTC said it decided not to take action against Ann Taylor, because, according to the company, the January preview was the first and, to date, only such event. Also, only a small number of bloggers posted content about the preview and several of those disclosed the gifts. A sign posted at the event directed bloggers to disclose the gifts, though the FTC says it's not clear how many bloggers saw the sign."
The FTC's new guidlines state that bloggers and brands that fail to disclose sponsorships could be fined up to $11,000. And the main thing that appears to have kept Ann Taylor in the clear was the company's ability to cooperate with the investigation:
"LOFT adopted a written policy . . . stating that LOFT will not issue any gift to any blogger without first telling the blogger that the blogger must disclose the gift in his or her blog."
This is especially interesting in light of comments that FTC officials made earlier this year.
In January, Len Gordon, the FTC's Northeast director, said that bloggers over reacted to the new rules, and that violations would be considered according to their severity:
"It's one thing if it's a packet of soap, another if it's an automobile. It's going to depend on the particulars."
But nowhere here does it look like the actual payment in question was significant. And yet, Ann Taylor avoided paying fines because it promised not to do it again. Chances are, we'll be seeing some fines being handed out soon for similar violations.