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FTC Wants To Clarify: Bloggers Probably Won't Get Dinged $11,000

Note to the Federal Trade Commission: Don't make a blogger mad. Or confused.

That's just what the agency did this week when it announced new guidelines that require bloggers and celebrities to fess up when they receive payments for endorsing products. That part was not particularly controversial -- though the guidelines spurred tons of navel-gazing questions on what that meant and who was a blogger. What really set off the blogosphere were reports (including mine) that any violations of the new guidelines could cost bloggers up to $11,000 per incident.

Richard Cleland, assistant director for the division of advertising practices, now says that's wrong and wants to explain. Even with his very long legal explanation to me over the phone (involving how the FTC Act is administered and the agency's relation to courts, and the difference between a cease and desist order and regular old warning), I'm still not convinced that what I had in my story Monday was wrong: "Punishments for violations will range from a warning letter to a fine of up to $11,000 per violation."

What's important for people to know, he said in our conversation Thursday, is that the FTC doesn't directly hand out fines and that it is very unlikely that any case would get to the point.

He said the FTC would most likely send an warning letter to a blogger who pitches for Jiffy but doesn't disclose receiving funds from Virginia peanut farmers.

But: "We do not have authority to impose a fine for violation of the (FTC) Act," said Cleland. If things escalate, he said, the FTC could take it to the courts, which could lead to a series of events that eventually lead to a fine.

"The confusion has arisen, I think, because we do have authority to ask for a civil penalty to be imposed by the Federal district court judge in the event that trade regulation rules are violated," he said. "I have to tell you that there is no realistic scenario that we get from here to there."

By Cecilia Kang  |  October 9, 2009; 9:00 AM ET
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