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In 2007 NVIDIA hocked iPods to those willing to review its new video cards. The FTC has finally come out looking to take a stand against payola and gifts in the tech news industry. But can it do a good job at limiting such practices without hurting the industry?  (Source: DailyTech)
The government tries to step in and make the news more accurate

In 2007 DailyTech founder Kris Kubicki made waves when he and Gabriel Ikram released a study showing that many tech news sites were willing to write favorable reviews of products in exchange for free merchandise, or even cash bribes (payola).  In the years since the tech news industry has evolved, but invariably such practices remain more common than they should be.

Now, the Federal Trade Commission (FTC) is looking to crack down on bloggers who mislead customers in exchange for payouts.  The plans were revealed by the Associated Press over the weekend.  The AP revealed, "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."

The move could force disclosure of even seemingly "innocent" payouts, such as affiliate fees handed to bloggers linking to Amazon.com sales pages for products they're reviewing.  They also would likely seek to end expensive gifts bestowed upon unscrupulous bloggers.  Famous past examples of such gifts included NVIDIA's gifting of iPods to reporters, and Microsoft shipping 90 Acer notebooks with Windows Vista to bloggers.

One of the most controversial payment driven review services, Izea, will likely be untouched, though.  Izea, whose PayPerPost service has created a stir in the blogging community, is relatively careful to provide sufficient legal disclosures, warning its readers that its reviews are not unbiased.  Writes CEO Ted Murphy, "The companies that should be worried about these changes are those that have no standards and no way to enforce disclosure.  We have invested millions of dollars creating systems that allow us to automate transactions and verify standardized disclosure."

While some practices may be put to an end under the new rules, some perks like travel and meal reimbursement are more likely to remain.  Many of these perks are enjoyed by print journalists and additionally by the politicians and bureaucrats themselves who are crafting the regulations.

As with many things that seem good in some ways, the new regulations could have a dark side, though, depending on how they are enforced.  Some warn that if the FTC probes and investigates bloggers to vigorously, it will kill the movement and the burgeoning blogging industry.  Others question whether the FTC will merely be throwing water (or money) on a chemical blaze, given the vast nature of the internet and plethora of new blogs that appear and disappear like the sands of time.  These critics say that such regulation would ultimately prove futile and costly to taxpayers.


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How much has anandtech received?
By gigahertz20 on 6/22/2009 4:51:38 PM , Rating: 3
So how much free stuff has Anandtech received over the years for writing reviews on all the various products? Regardless, Anandtech articles have always been great and unbiased but I would be curious to know how much free stuff these companies hock at you guys to maybe persuade you to make a review favorable.




RE: How much has anandtech received?
By KristopherKubicki (blog) on 6/22/2009 5:00:47 PM , Rating: 5
He pretty much gets one of everything from every body except Apple.


By ImSpartacus on 6/22/2009 5:18:07 PM , Rating: 2
Bastards...


RE: How much has anandtech received?
By bigboxes on 6/22/2009 5:50:13 PM , Rating: 2
and how do I get on the list for the hand-me-downs? ;)


RE: How much has anandtech received?
By rudy on 6/23/2009 11:32:58 AM , Rating: 2
Start your own review site.


RE: How much has anandtech received?
By JustKidding on 6/22/2009 6:43:37 PM , Rating: 3
Kris, thanks for responding openly to the question about gifts. I value the information on Anandtech and consider it generally above reproach. I am glad that you appear to place equal value upon standards of ethics, honesty and open debate here on DailyTech. I am curious about the disappearance of a post (not mine) on this thread, which I thought a rather gentle tease of one of DailyTech's bloggers. Perhaps the author deleted it, but it would be disconcerting to think that someone else had removed it, as it was not a personal attack and in fact, had some merit.

Btw, I don't really think that 'hock' was quite the word that the author was looking for. ;)


RE: How much has anandtech received?
By dflynchimp on 6/22/2009 11:01:36 PM , Rating: 2
It's also a little tongue in cheek humor in Kris's answer since if you got one of every kind of gift from every company (Intel/AMD, Nvidia/ATI, etc) then technically you still have no motive for bias, since everyone's treating you equally.


RE: How much has anandtech received?
By Jedi2155 on 6/23/2009 12:03:06 AM , Rating: 4
Well here's one for the rep. of Anandtech.

I've been a member of a focus group for a large player in the computer industry, and when I once asked why don't they send some of their products to AnandTech for review they responded "well we use to do that but we were burned by them one time and not going to make that same mistake again."

So I believe AnandTech tends to keep their integrity pretty well.


RE: How much has anandtech received?
By Boze on 6/24/2009 6:54:13 AM , Rating: 2
So instead of, "We need to produce a better product, because one of the most iconic review sites on the Internet thinks we can and should do better.", they decided, "We'll just accept the fact that the products we put out are shit, instead of trying to make something worth a damn." Wish I knew who you were talking about, so I could make doubly sure I don't ever purchase anything of theirs, along with making sure no one I know or associate with uses their products.

Pass that comment on to 'em.


By KristopherKubicki (blog) on 6/23/2009 1:12:41 AM , Rating: 5
I am a former AnandTech editor, and I am very proud that AnandTech carried an impeccable reputation for full disclosure when I was with the publication. I made this practice a cornerstone of DailyTech's publication requirements and my successors did the same at AnandTech. That you trust AnandTech is a compliment to me, Anand and the staff of both publications.

I can personally guarantee that nobody has access to casually delete comments on DT, myself included. The only thing I can think is that it got downrated to the bottom of the thread.

I'm glad you see value in the free discussion encouraged by the DT format. I consider it essential to the success of the publication. Thank you


RE: How much has anandtech received?
By marvdmartian on 6/23/2009 9:20:49 AM , Rating: 2
I can understand the concern about getting "gifts" for doing reviews, and wholeheartedly agree with it.

But what happens to the items being reviewed, after the person is done reviewing them? Are they reclaimed by the manufacturer? Or do they become the new toy of the reviewer??

Seems to me, with brand new video cards and such, that keeping the reviewed items could even be considered a form of reward, couldn't it?


RE: How much has anandtech received?
By rudy on 6/23/2009 11:44:20 AM , Rating: 2
Many of these things are kept I knew a case reviewer and he was constantly selling off or giving away the ATX cases he was given.

Like most things I believe it is normal and fine to give people stuff for a review. I believe eventually if you are not honest it will root you out. Personally the FTC should be looking at all the purely fake ranking sites out there first. If you look at say webhosting you will see lots of topX sites and reviews that are clearly owned by the company that has the # 1 spot. But I guess that is part of the consumers job. Personally I never look for opinions in reviews I only look for facts. Can the product do X or what does it not do.


Hypocrites
By BladeVenom on 6/22/2009 4:46:52 PM , Rating: 2
I didn't think the government considered bloggers as reporters, at least not when it comes to offering them the same protections to protect the confidentiality of their sources.




RE: Hypocrites
By Danger D on 6/22/2009 4:53:09 PM , Rating: 2
There is a shield law passed by the House, under consideration in the Senate, but right now reporters aren't really protected.


RE: Hypocrites
By Danger D on 6/22/2009 5:12:50 PM , Rating: 5
Most reporters find the need to use a confidential source a few times in their career.

Confidential sources were traditionally used only when 1. There was no other possible way to get the information. 2. The information was vital to the public’s good. 3. The source’s identity is known by the editor so he or she can verify the source’s authority and relevance (Watergate being a notable exception). It used to be a frowned-upon and rarely used way to get a story. The idea was, “If you won’t publicly stand behind your words, your credibility is questionable.”

Most bloggers, on the other hand, don’t even blink when asked to keep a source anonymous. They are accountable to no one, and they have no checks upon them to ensure credibility. Some have enough internal ethics to do a good job, but most don’t.

The rumor-mill style of journalism that blogging represents has had an unfortunate effect on mainstream journalism. Newspapers have adopted some bad habits in the effort to keep up with the blogosphere. It used to be that a reporter would hear a rumor and spend hours, days, weeks working to get reliable confirmation. Now, because of the likelihood that the rumor will hit the blogs, newspapers have started posting rumors and unsubstantiated claims. D.C. reporters in particular have willingly made themselves PR pawns for every politician’s handler looking to float an idea or discredit a rival.

I love blogs, but I prefer it when they stick to opinion pieces rather than trying to break news.


RE: Hypocrites
By Danger D on 6/22/2009 5:17:11 PM , Rating: 4
Case in point of newspapers adopting blogger ethics: the Brett Favre fiasco.


RE: Hypocrites
By vhx on 6/22/2009 8:20:28 PM , Rating: 1
Not like it matters really. It's not illegal to falsify news in the first place.


RE: Hypocrites
By msomeoneelsez on 6/23/2009 3:47:39 AM , Rating: 2
Although libel is illegal...

Libel is:
An untruthful statement about a person, published in writing or through broadcast media, that injures the person's reputation or standing in the community. Because libel is a tort (a civil wrong), the injured person can bring a lawsuit against the person who made the false statement. Libel is a form of defamation , as is slander (an untruthful statement that is spoken, but not published in writing or broadcast through the media).
http://www.nolo.com/definition.cfm/Term/7613C25C-8...


RE: Hypocrites
By Regs on 6/23/2009 7:01:16 AM , Rating: 2
Good luck enforcing that one is all I can say.


RE: Hypocrites
By Danger D on 6/23/2009 9:15:47 AM , Rating: 2
Media actually do have special protections from libel. The biggest hurdle to clear in suing the media is that you have to prove intent to harm the person's reputation. That means a simple mistake can't be prosecuted; it has to be an intentional and malicious. It can be wrong, poorly researched, etc. without penalty.

Also, humor and parody is protected. Biggest test of that was when Larry Flint printed a cartoon saying that Falwell did some, um, inappropriate things with his mother as a child. Blatently untrue, but protected.

I'm not a lawyer, but I would think bloggers would also get that protection. Not sure if it's been tested.


RE: Hypocrites
By FITCamaro on 6/22/2009 5:22:03 PM , Rating: 5
Exactly. Blogs aren't news.


RE: Hypocrites
By MrPoletski on 6/23/2009 7:58:40 AM , Rating: 3
That's news to some people...


RE: Hypocrites
By foolsgambit11 on 6/23/2009 3:49:56 PM , Rating: 2
That doesn't really matter though. Whether they're news or not, they are definitely part of 'the press', in the modern sense of the term. I'm pretty sure there aren't any real legal distinctions between different content types when it comes to truth in advertising and disclosure laws.

Freedom of the Press isn't in place to protect only unbiased news sources. In fact, there wasn't even the concept of an unbiased news source when the Constitution was written, and there definitely weren't major media conglomerates. Most of 'the press' was people self-published pamphlets to distribute. If that's not old-school blogging, I don't know what is.

Of course, in this modern world, consumers are (apparently) too stupid to evaluate the claims of what they read skeptically, so we have consumer protection laws that 'abridge' the Freedom of the Press. They apply to blogs, news sites, advertisements, entertainment, radio, internet, TV, printed media, &c. - it's all the press.


Good for Accountability
By mfed3 on 6/22/2009 5:13:47 PM , Rating: 2
Good, someone needs to be held accountable for the bullcrap that is spewed over the internet. 99% of Engadget and Gizmodo are prefixed with "Rumor:" and half of the bullshit is fanboy bait out to attract attention with no intentions of unveiling real news, reviews or specifications, but to draw in users for ads and statistics. Anandtech is seriously one of the only sites I trust for any product reviews. Keep up the good work.




RE: Good for Accountability
By deanx0r on 6/22/2009 5:58:54 PM , Rating: 1
Why aren't you held accountable for the different news outlet you read? Do you make the difference between People magazine and the Wall Street Journal?

I see this as an infringement of the first amendment, whether the bribe was a car or a lunch. The last thing we need is a government getting their hands on the internet.


RE: Good for Accountability
By Oregonian2 on 6/22/2009 6:30:03 PM , Rating: 2
quote:
I see this as an infringement of the first amendment, whether the bribe was a car or a lunch. The last thing we need is a government getting their hands on the internet.


So corporations who sell fake merchandise on the internet (presenting them as genuine) should be untouched by all governments? Even if they don't collect intra-state sales taxes that are legally due -- because it's on the internet? What if someone wants to sell illegal substances on the internet? Untouchable by governments?

Are you saying that it's all or nothing? If not, how does the boundary get defined?


RE: Good for Accountability
By deanx0r on 6/22/2009 8:34:08 PM , Rating: 2
But this isn't about a company selling dubious goods across the internet, it's about people expressing their opinions and views across it.

Now, if a company is selling a dubious goods that may be harmful to the user, say a diet drug which side effect may lead to death, then you can use the government to shut them down.

For instance:

How would you feel if the government barged in at Dailytech and hand picked all the comments to be deleted or edited because someone didn't like them? It's not their job. If something inappropriate was posted here by commentators or bloggers, then it falls down to the owners or editors at DT to do something about it, not the the government.


RE: Good for Accountability
By Oregonian2 on 6/22/2009 9:41:23 PM , Rating: 2
My followup to your posting had to do with your justification of "no government" by just defining that governments shouldn't be involved with the internet. Rather than saying (at least as I read it, might just be a misunderstanding) in effect that the government needs to regulate some aspects of the internet, but not that one.

You now (which I agree with) say that sometimes they should be involved with what's on the internet, it's just as matter of deciding what.

As to your example -- that's not what was being talked about. NO editing of ANY material was being asked for. Articles can STILL be full of lies and paid-off cronies pushing defective goods through great reviews for pay. It just ADDs a disclaimer to such articles that the author was paid (or was given the goods free -- which may or may not influence the review), or whatever the case may be.

P.S. - I don't think my posting here is what they had in mind for "blogs" that were being talked about. In any case, I wouldn't be surprised if one some page of this site there's some description or terms of use with a disclosure that everything posted by everybody is only their opinions and that they may be nuts (written in lawyerese of course).


I dont know
By dragonbif on 6/22/2009 4:49:53 PM , Rating: 2
If they keep the big ones disclosing then it is fine but if they go after all the little ones that come up then it is a waste of money and time. They could have a little mark on their web site from the FTC or something to tell people that they are approved reviewers.




RE: I dont know
By Danger D on 6/22/2009 5:29:16 PM , Rating: 2
That's an interesting idea, although I don't think the government should be the one approving journalistic standards. That smacks of China. But some independent accrediting organization would be very valuable.


RE: I dont know
By dragonbif on 6/22/2009 8:29:57 PM , Rating: 2
Like how the BBB is with businesses? I get you.


How far is too far?
By rs1 on 6/22/2009 4:55:16 PM , Rating: 2
While I can understand the desire to more tightly control large bloggers/websites who use their reviews as a way to generate revenue and who receive a large number of readers, I think that if "blogger" is allowed to include anyone with a MySpace, Facebook, Blogspot, or Wordpress (or any of the other similar ones) blog then it goes a bit too far. If I want to post something about how nVidia makes the best graphics card ever, then isn't that my right, even if it just so happened that nVidia sent me my graphics card for free?

It may not be honest to do such a thing without mentioning that nVidia gave the card away, but at the same time, since when am I required to be honest on my own personal web-space, and since when does my personal website fall under the domain of the FTC? While I understand the motivations at play here, I think a very fine line is being walked between protecting the consumer, and trampling all over the free-speech rights of small/amateur bloggers. And that makes me very wary indeed.




RE: How far is too far?
By Oregonian2 on 6/22/2009 6:23:27 PM , Rating: 3
Although I think I agree with you I've two devil's advocate comments:

1. If one's domain is a ".com" then it's a .COMmercial domain, not personal.

2. They're not restricting any speech whatsoever as I read it. They're actually have one ADD to whatever one wants to say (the disclosure).

:-)

P.S. - And yes, my main personal domain is a .com. :-)


Gullible
By Danger D on 6/22/2009 5:15:13 PM , Rating: 2
None of this would be necessary if people were smart enough to understand what a blog actually is and show some healthy skepticism.




RE: Gullible
By Oregonian2 on 6/22/2009 6:25:45 PM , Rating: 2
I variably discount what comes out of news organizations as well.


Double Plus Good
By ZachDontScare on 6/22/2009 5:49:24 PM , Rating: 2
quote:
The government tries to step in and make the news more accurate


That subcaption is a little too Orwellian for me.

Hey, maybe next they should crack down on people who post blatent lies about radio talk-show hosts encouraging boycotts.

Other than the tax implications - the 'free' stuff needs to be treated like income - the govt needs to keep its grubby hands off the blogs/news. I'd rather have rampant payoffs than the government deciding what is and is not 'accurate'.




RE: Double Plus Good
By foolsgambit11 on 6/23/2009 4:13:33 PM , Rating: 2
They already do decide what is and is not 'accurate' in advertising. And when you accept payment for a "review", you're an advertiser - or, more accurately, an endorser - and not news. The change just clarifies that point, and makes you subject to the same rules that apply for all endorsements.

Why is it that any time the government reminds us that the internet is not a lawless 4th dimension, but rather an extension of our brick and mortar lives, somebody claims their actions are an unjustified intrusion and a step towards totalitarianism?


How long?
By DigitalFreak on 6/22/2009 8:17:27 PM , Rating: 2
How long will it be before DailyTech is under investigation? Maybe the FTC can bring in the grammar police while they're at it.




RE: How long?
By hyvonen on 6/22/2009 10:40:13 PM , Rating: 2
Didn't I read it somewhere that the DT has an editor to go through the articles...? Sure doesn't seem like it...

Then again, this isn't New York Times.


By spkay on 6/22/2009 8:24:10 PM , Rating: 2
They can't guarantee the safety of people using mass transportation - 'the longtime darling of the liberal left' - and they are "cracking down on inaccurate blogging!"

Wait till we see the ultimate train wreck they make out of GM, Chrysler and our health care system. We'll be longing for the days of a good old fashioned train wreck.




By bodar on 6/22/2009 10:35:59 PM , Rating: 2
Cool story bro.

Seriously, WTF does this have to do with bloggers and payola? At least make it an entertaining read next time.


Undisclosed "sponsored" blogging
By crystal clear on 6/23/2009 2:24:53 AM , Rating: 2
The law & proposed changes-

Current Section 255.0(b) defines an endorsement as any advertising message that
consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party
other than the sponsoring advertiser.

The Commission proposes revising that section to clarify that in determining whether statements in an ad constitute an endorsement, it does not matter
whether the statements made by an endorser are identical to or different than those made by the
sponsoring advertiser.
Similarly, the Commission proposes a minor modification of Example 4
(deleting from the penultimate sentence the reference to the views of the sponsoring advertiser)
to make it clear that the only relevant criterion in determining whether a statement is an
endorsement is whether consumers believe it reflects the endorser’s views.
Example 1 to Section 255.0 currently provides one example of an endorsement and also
illustrates the principle that an endorsement may not be presented out of context or reworded so
as to distort the endorser’s opinion.
The Commission proposes to add a cross-reference to
Section 255.1(b), which states this principle explicitly.
The Commission proposes adding a new Example 6 to Section 255.0, to illustrate that the
determination of whether a speaker’s statement is an endorsement depends solely on whether
consumers believe that it represents the endorser’s own view. Specifically, the new example
clarifies that whether the person making the statement is speaking from a script, or giving the
endorsement in his or her words, is irrelevant to the determination.
The Commission also proposes adding a new Example 7 to Section 255.0, to illustrate
that well-known persons can appear in advertising without being deemed endorsers.
B. Section 255.1 – General Considerations
Section 255.1 sets forth principles that apply to endorsements generally (e.g.,
endorsements must reflect the honest opinions or experience of the endorser, and may not
convey any representation that would be deceptive if made directly by the advertiser). The
Commission proposes one significant revision to this section of the Guides, the addition of a new
Section 255.1(d) explicitly recognizing two principles that the Commission’s law enforcement
13
activities have already made clear. The first is that advertisers are subject to liability for false or
unsubstantiated statements made through endorsements, or for failing to disclose material
connections between themselves and their endorsers. The second is that endorsers may also be
subject to liability for their statements. The Commission has brought law enforcement actions
against both expert endorsers and well-known personalities (i.e., celebrities) who have acted as
endorsers.

http://www.ftc.gov/os/2008/11/P034520endorsementgu...




By crystal clear on 6/23/2009 2:29:31 AM , Rating: 2
FTC plans to monitor blogs for claims, payments

http://www.google.com/hostednews/ap/article/ALeqM5...


Does this really shock anyone?
By Obujuwami on 6/22/2009 10:46:18 PM , Rating: 2
I mean honestly! Maybe its the fact that I once worked for a radio station as a sales guy and had to learn the rules of payola and plugola, maybe not, but we all know that businesses will give you freebies to get you to buy stuff. Anyone that has ever been to a "trade" show knows its a place learn about whats up and coming in your trade, but also a way for the business to "influence" you to buy their stuff. They had out swag (pens, t-shirts, etc) but when it comes to the end, they usually pull out the big bucks and give away actual tangible things.

Don't believe me? Go to any tech event and watch what happens as things progress.




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