Profit-driven bloggers face crackdown

By Kim Tong-hyung

The government has unleashed the hounds on the country’s most popular bloggers, who are facing new questions about the credibility of their writings as scrutiny grows over their evolving relationship with companies.

As the corporate world increasingly embraces blogs and social media as business tools, there has been brewing debate on whether online product reviews could be relevant when authors are offered freebies and even money.

The lid blew off on the arguments earlier this month when a blogger known as ``Baby Rose,’’ one of many online Martha Stewart impersonators, was exposed for taking about 200 million won (about $190,000) from sterilizer maker Lolus after using her webpage to solicit customers for the company’s latest product.

However, the Ministry of Knowledge Economy later advised the company to recall the device after it failed to pass safety tests, touching off an uproar across message boards and forcing Baby Rose to press the self-destruct button on her blog.

The controversy obviously has the government feeling it needs to do something about these ``non-purist’’ bloggers motivated by the smell of cash. And now the National Tax Service (NTS) and Fair Trade Commission (FTC) are looking into them.

The tax agency said Thursday that it has put 1,300 of the most popular bloggers publishing on the platforms of web portals Naver (www.naver.com) and Daum (www.daum.net) on its watch list. This is to determine whether the bloggers have been generating untaxed income through their product reviews and sales promotions, NTS said.

This came days after the FTC announced a new set of measures to regulate how companies get their products endorsed on Internet and to improve the accountability of content creators.

Under the new rules, bloggers will be required to include endorsement messages in their writings when reviewing products under a marketing program by a company. A failure to do so could have the company fined as much as 2 percent of the revenue the product has generated to that point.

Bloggers who arrange product purchases without disclosing the commissions they receive from companies will face a maximum fine of 10 million won, according to the antitrust watchdog, which plans to hold them accountable to the Electronic Commerce Law.

Blogs and social networking sites like Facebook (www.facebook.com) and Twitter (www.twitter.com) are being heavily used as marketing platforms for companies in technology, household goods, food and leisure, which often put online writers on the receiving end of targeted perks and payments.

``It seems that a lot of bloggers and Internet community managers on sites like Naver and Daum are being paid by companies to promote their products and arrange `group purchases,’ which they often use as convenient ways to avoid paying taxes,’’ said an NTS official.

``Although these so-called `power’ bloggers wield significant influence on the Internet and get paid for it, not many of them are listed as retailers, which makes it hard for us acquire the material needed to tax them,’’ he said, indicating that a lot would depend on how much information tax authorities could get from Naver and Daum.

Judging by their comments, the larger number of bloggers seems to support the new rules that require bloggers to unveil their endorsement connections as they admit the blurring line between genuine postings and paid advertisements is a serious problem.

But they also express concerns about an over-the-top government handling of the issue with regulations instead of allowing the blogosphere the room to sort it out on its own. Although customers definitely need better protection from deceptive product representations, this doesn’t mean that the basic idea of blogging for a living should come under attack, they say.

Perhaps, the core of the problem lies in the irony that many serious bloggers work to build their reputations in the blogosphere just to get out of it, to find more lucrative, corporate-backed platforms that provide a better way to monetize their content.

Of course, there are many more online writers willing to settle for the lower-hanging fruits, including those provided by companies looking to create word-of-mouth buzz for their new products and services.

These firms have also worked closely with websites like Naver and Daum, which have been zealous about using blogger reviews to boost traffic. However, this clearly has come at the cost of the quality in search results, which seem irrevocably contaminated by overflowing puff pieces.

``What we now need are guidelines, not regulations,’’ wrote Myeong Seung-eun, an influential blogger and president of Tatter & Media, a Web-based media company.

``The blogosphere will have to be able to solve this problem on its own. My experience tells me that that involvement of government in these issues often leads to unjust laws or regulations that fail to achieve what they were prescribed for.’’