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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.




"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton
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