Bloggers, as reported earlier, are specifically mentioned by the recommendation, which has obvious implications for the specialty press covering video games. "The post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service."

The pivot here is what constitutes an in-kind payment. Games do have a value, but is agreeing to review a game an endorsement, regardless of whether the review recommends it or not?

It's also important to note these new guidelines do not themselves have the force of law. They are:

"[...] administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act."

So there are two layers here: One, that it's not even law and two, does it even apply to video game reviews? Either way, the singling out of a blogger's endorsement is significant.

FTC: Freebies Must Be Disclosed [Game Politics]

The commission, in the process of reexamining the disclosure rules for their truth-in-advertising guides, are now calling out bloggers as a potential issue. The commission says it is looking into the legitimacy of blogger opinion and whether access to review product influences their write-ups. They don't, however, seem to be concerned over similar practices in the print and mainstream media.

Instead of relying on specific rules, the FTC's guides use a set of examples to lay out issues that they have identified. In talking about the importance of disclosure of material connections between the endorser and the seller, the guide uses an example aimed directly at online video game journalism:

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or "blog" where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. The readers of his blog are unlikely to expect that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact would likely materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

While this example is talking about free consoles, what about free games or free movies or free books?

Most newspapers allow their critics to go to free screenings of movies so they can write a movie review. Most newspapers, in my experience, also allow critics to receive game code in one form or another and even retain loaner consoles so they can review games. Certainly every major gaming website, from GameSpot to IGN take free copies of games for review.

What's troubling about this FTC example isn't the expectation that the blogger should disclose that they received a free console, but that the rule seems to single out bloggers.

In seeking to delineate between a professional writer and a blogger, the FTC approaches a slippery slope that could very easily end with the government deciding who is and who isn't a journalist.

Equally troubling is the coverage of this issue by the New York Times, which seems to almost deliberately not get it. In a Sunday story entitled "When a Blogger Voices Approval, a Sponsor May Be Lurking", the New York Times reports on the issue making it clear that unlike journalists, some bloggers are for sale:

"But unlike postings in most journalism outlets or independent review sites, most companies can be assured that there will not be a negative review: if she does not like a product, she simply does not post anything about it."

I do like some of the ideas spelled out in the document, in particular the notion of advertising and marketing folks not being allowed to flood a message board with false praise for their product without identifying themselves. But who is going to differentiate between "most journalism outlets" and "independent review sites" and bloggers? And how will they do so?

When the government gets in the business of identifying journalists and setting up a separate set of rules for those that don't make the cut, it's more than a little troubling.

[Pic]

GameStop's "check-out" policy, confirmed to Kotaku by a number of the chain's managers and employees, could fall under scrutiny of the Federal Trade Commission.

Reached for comment this afternoon, GameStop officials declined to comment.

"We do not comment on corporate policies that are competitive in nature," said Chris Olivera, vice president of corporate communications. "As your questions relate to company training, operations and discounting practices, I would not be able to provide feedback."

Kotaku contacted the FTC earlier today to determine if the practice, which sells games already played by employees at the new price, not the used price—used titles are typically priced about $5 cheaper than brand new versions—would be considered deceptive advertising or marketing. The FTC's Bureau of Consumer Protection is mandated to protect consumers against unfair or deceptive acts or practices in commerce. Violations of FTC restrictions are a violation of federal law, according to the commission.

"The Federal Trade Commission protects consumers from unfair or deceptive advertising and marketing practices, and we encourage any consumer with a complaint about a company's business practices to contact us," said FTC public affairs specialist Betsy Lordan.

Lordan said she was unable to confirm or deny the existence of any investigation that the commission is conducting. As a rule the FTC does not comment on the conduct of a particular business.

The company's check-out policy, provided to us and verified by a number of GameStop employees states:

Associates are allowed to check out one item of store merchandise for personal use for up to four days. Merchandise checkout is a privilege, not a right, and may be revoked at any time.

Hardware, accessories, sealed CDs or software programs that must be altered to install may not be checked out. If the on-hand quantity of a product equals one, the item cannot be checked out. Hot titles may also be prohibited from being checked out, regardless of the on-hand quantity in the store.

Associates may only check out items from the store in which they work. Associates are personally responsible for any merchandise they are allowed to check out.

Merchandise must be properly checked out in the Employee Merchandise Check Out Log in the Game Planner.

If the product is returned in unsellable condition, or if anything is missing from the package, or if the product is not returned, the Associate must purchase the product at the current price less Associate discount.

Copying of the software and/or manuals/instructions is illegal and is strictly prohibited. Merchandise that leaves the store without being properly checked out or purchase is considered to be unauthorized removal of Company property and may result in performance coaching up to and including termination of your employment.

According to a number of GameStop employees and managers across the country, all of which spoke to us on the condition of anonymity, new copies of games rented out to employees are often mixed in with the unplayed display copies. And both are sold at "new" prices.

When a shipment of video games initially arrives at a store, managers are told to "gut" several copies of the game, removing the disc or cartridge from the packaging so it can be displayed on the shelf without concern of theft, according to our sources.

The games are then placed in protective sleeves or cases under the counter. If a customer asks why the game is not sealed they are typically told the the game is a display copy. The game is still sold as new.

When check-out games are returned, we were told, they are placed with the gutted display copies. If a customer asks about these, they are typically told they are display copies, not that they have been played before.

Since the copies are often placed with display copies, even managers and employees typically don't know which of these games have been played and which haven't.

While some GameStop managers will on occasion offer a "Shop Worn Discount" for a gutted or checked out title, we are told by our sources that this is actually against GameStop policy which states:

"Do not apply Shop Worn Discounts to any new, used or checked out games, it may only be applied for damaged packaging and new accessories which have been opened."

Headquartered in Grapevine, Texas, GameStop is the world's largest video game retailer, operating nearly 6,000 stores worldwide. The company's revenue was $8.8 billion in 2008.

Michael McWhertor contributed to this story.

Update: Legal experts way in on the story.

While EA believes that its proposed transaction with Take-Two would not be anti-competitive, the FTC has not yet reached any conclusions regarding the proposed acquisition and has indicated that it needs further information and additional time to conduct its review.