16 C.F.R. Part 255

16 C.F.R. Part 255 refers to the new FTC Regulations that go into effect tomorrow , December 1, 2009.  The regulations concern the obligation of bloggers and celebrities to disclose if they are being compensated when they talk about someone or something.  This interview with a senior official at the FTC, particularly the examples, provides a terrific overview of the scope and intent of 16 C.F.R. Part 255.  In general, the new regulations are common sense – if a reasonable consumer would not know that you are being compensated for your post or endorsement (either with money or free goods), you have to disclose the relationship.  How you disclose it is up to you.  While the fines for not disclosing can be as high as $11,000, if you are not trying to intentionally deceive the public (like saying Acai Berries cure cancer), most likely you will be warned by the FTC and given the opportunity to change your disclosure.

For creative businesses seeking validation through third party sites/blogs, the new regulations and the transparency they will require hopefully marks a big shift in the way these businesses currently operate.

Being on a “Best Of” list just because you are willing to pay the fee says nothing about the strength of your business.  Being on a “Best Of” list because you ARE the best is what matters, regardless of whether you have to pay to be on the list or not.  Gaining admission to Harvard Business School or to Augusta National or most social clubs for that matter is no small feat.  In all instances, you have to pay for the privilege of belonging.  What is important is the reputation and expertise of those with whom you seek validation and the legitimacy of your place in their organization.

What the new FTC regulations will do over time is eliminate those that are not “experts” as validators and those creative businesses that try to buy instead of earn their way in.   More pressure will be on the validators to say why it is that they are experts and what they offer the reader to support their position.  The requirements a creative business will have to meet to be validated by the expert will be equally important.  If either falls short, I cannot see how the business will survive in the long run as a validator.

No matter how far social media or the Internet revolution takes us, content will always be king.  16 C.F.R. Part 255 makes sure that that content is transparent to the reader.  For those validators who already embrace transparency as a matter of integrity, the new regulations offer an incredible opportunity to reinforce the essence of your brand and the value you offer to both your readers and the creative businesses you validate. For those validators that do not embrace transparency, time is definitely not on your side.