Blooper

The Blooper item squirts ink onto the racers in front of you, making it harder for them to see and causing them to lose traction and speed.

Use

When activated, the Blooper will hover in front of the screen of each racer in front of you for about two seconds, then squirt ink on them. The ink covers much of their screen, obstructing their vision. The ink cannot be seen in the rear-view camera. The ink also coats their kart, making it appear black. This is visible to all players in the room.

When a kart is covered in ink, its speed is reduced by 3%, which is the equivalent of losing 10 levels of your speed stat. It also reduces your traction to a fixed amount, which is equivalent to the kart combo with the lowest traction, driving on the most slippery terrain. Getting Blooper'd on a slippery track like Sherbet Land will make less difference than getting Blooper'd on a regular track.
Check out this experiment by Reddit user ItzManu001 for more information.

Avoiding

The Blooper can be avoided by using an invincibility item like a Star, Boo, or Bullet Bill. If you are using one of these items at the time a Blooper is activated, you will not be targeted at all.
The blooper can also be eaten by a Piranha Plant.

You can get rid of the Blooper's ink by:

• using a mushroom
• driving on a dash panel
• entering water (doesn't count if you're already in water)
• activating an invincibility item