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The Federal Trade Commission today released a document (PDF) outlining some new rules that go into effect on December 1st, the first revision of its rules regarding endorsements and product reviews since 1980. There’s some stuff in there about celebrities being able to be held liable for false claims that they make in endorsements, but the bit that’s got the internets in a huff has to do with regulating what can (and must) be said by bloggers.

Basically, if you’re pretending to be an objective reviewer of a product or service, but you’re actually being compensated in some way for posting positive reviews, the FTC can slap you with a fine of up to $11,000 per violation if you don’t disclose that compensation up front.

On the face of it, it’s an excellent modification to rules that were written back when the closest things we had to blogs were mimeographed and stapled fanzines. It’s the 21st century equivalent of forcing an advertiser to put a little “ADVERTISEMENT” banner at the top and bottom of a newspaper ad that’s formatted to look like an article.

And quite honestly, the online world probably needs something of the sort—especially in the video game industry. If you’ve never worked as a game reviewer (particularly in a staff position at a magazine), your mind would be blown by the sheer volume of swag that gets thrown your way by PR folks who desperately need you to say something great about a game that might not be.

image © Cnet.com

The most egregious example I ever came across in my own career was back in 2000, when I was working as a News Editor for a gaming magazine that no longer exists:

A European game publisher who had the rights to make games based on a famous athlete flew me and about a dozen other U.S. journalists across the Atlantic on their own dime and put us up for a long weekend. Ostensibly, it was a press junket to visit the company’s offices and see the titles they had in development, but in reality, it was a three-day party. As soon as we got the three or four hours of previewing the company’s games out of the way, it was nothing but clubbing, fancy dining, lots of drinking and VIP seats to see their celebrity athlete compete.

When I got back to the States and had to write up the previews of the games I’d seen, I found myself in a predictable quandary: the games that they showed me weren’t very good at all, particularly their big-money athlete’s game. At the same time, I did feel a tremendous sense of gratitude for my all-expenses-paid European vacation.

I tried not to let that affect my previews—which are generally written from an optimistic perspective as a rule, since they’re not reviews of finished products—but I couldn’t swear that I was as objective as I would have been had the company just sent me builds of the games to play in the office. And when it came time to review them, I handed the duties off to someone else. So my conscience is fairly clear on that front, but I know that some of my peers chose not to take the same route.

However, as well intentioned as these new rules are, there are a number of points of concern. Dan Gillmor sums up some of them in an excellent piece posted yesterday on Mediactive:

First, the new system is unworkable in practice, which is bad enough. Worse, the rules are worryingly vague and wide-ranging. Worse yet, they appear to give traditional print and broadcast journalists a pass while applying harsh regulations to bloggers (and others using conversational media of various kinds). Worst and most important, they are, in the end, an attack on markets and free speech, based on a 20th Century notion of media and advertising that simply doesn’t map to the new era.

The advertising of the past was a one-to-many system. Call it broadcasting. The Internet is a many-to-many system. Call that conversation. They are not the same.

As an example, what’s the protocol if one of my game designer friends sends me a free copy of their latest game, which I legitimately happen to like, and I want to tweet about it? 140 characters doesn’t leave much room for me to disclose that I was given free merchandise that may or may not have influenced my opinion.

image © Kotaku.com.au

Similarly, what constitutes “compensation?” The FTC says that free product counts as compensation, but where’s the cutoff? Is the aforementioned example of a free copy of a game enough to meet that threshold? Obviously, you need a copy of the game to be able to review it, and a boxed retail copy will only make you a few bucks if you sell it when you’re done with it. Or is it a volume thing? I know plenty of people in the industry who are on so many comp lists that they haven’t bought a game in years; if they’re not sent a game that they want for free, they have plenty to trade in for enough credit to buy it outright.

I’m reassured by the fact that the FTC is saying that they’re more likely to go after advertisers rather than bloggers, and that they’re focusing on educating and informing everyone of the rules change, instead of leading off with a slew of fines. But at a certain point, these rules need to be enforced if they’re to have any teeth, and that’s when we all need to be vigilant about how that’s done and ready to kick up a fuss if necessary.