On December 11, 2006, the Federal Trade Commission issued a statement that said companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.
From the article:
"The FTC said it would investigate cases where there is a relationship between the endorser of a product and the seller that is not disclosed and could affect the endorsement. The FTC staff said it would go after violators on a case-by-case basis. Consequences could include a cease-and-desist order, fines and civil penalties ranging from thousands of dollars to millions of dollars."
Many of you already know this, but for the benefit of those who don't, I never accept any form of compensation for what I write here at PBW. I don't participate in any online bookseller associate programs. I purchase every book that I give away with my own funds, or give away the free author copies of my novels that are provided to me under contract by my publisher. I pay for all packaging and shipping out of my own funds as well.
When authors, agents or publishers send me unsolicited manuscripts, ARCs or books, I either ship them back at my cost, send them to reviewers at my cost, or donate them to my local public library. I never sell or otherwise profit from them.
I've never been compensated for any quote I have provided for another author here or elsewhere, and I don't ask for or accept reciprocal quotes. I never pay other authors for promoting my novels on their web sites and weblogs, giving quotes for my novels, or otherwise endorsing my work. Anyone who does promote my novels does so freely by choice.
Many of you do go out and buy my novels because of what you read here, and I do receive royalties from the sales of those novels. This is the only form of profit I make that can be connected to my weblog. After the publisher, agent and Uncle Sam take their cuts, my share of the profits for my novels works out to about twenty cents per paperback and seventy-eight cents per hardcover. I appreciate anyone who invests in my novels, but I don't expect or demand it, and I have no control over those purchases.
So basically if the FTC comes knocking at my door, I have nothing to worry about.
Any blogger who is receiving any form of compensation for what they blog should post full disclosure policies as soon as possible. Even if the FTC never investigates you, your readers deserve to know, and it's the ethical thing to do. For more information on creating a disclosure policy for your weblog or web site, check out DisclosurePolicy.org.