Following a public comment period, the Federal Trade
Commission has approved a final
consent order with Machinima, Inc., requiring the company to disclose
when it has compensated “influencers” to post YouTube videos or other
online product endorsements as part of “influencer campaigns.”
According to the FTC’s
complaint, announced in September 2015, the California-based online
entertainment network engaged in deceptive advertising by paying
influencers to post YouTube videos endorsing Microsoft’s Xbox One system
and several games. The influencers paid by Machinima failed to adequately
disclose that they were being paid for their seemingly objective opinions,
the complaint alleges.
The final order settling the complaint prohibits Machinima
from misrepresenting in any influencer campaign that the endorser is an
independent user of the product or service being promoted. Among other
things, it also requires Machinima to ensure that all of its influencers
are aware of their responsibility to make required disclosures, requires
Machinima to monitor its influencers’ representations and disclosures, and
prohibits Machinima from compensating influencers who make
misrepresentations or fail to make the required disclosures.
The Commission vote approving the final order and responses
to public commenters was 4-0. (FTC File No. 142-3090; the staff contact
is Richard McKewen, FTC Northwest Region, 202-220-4595.)
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