YouTube Network's "Deceptive Marketing" Xbox One Campaign Case Settlement Approved

Machinima "influencers" will need to clearly disclose when videos are paid-for.


The US government's Federal Trade Commission has approved the terms of its settlement with YouTube network Machinima related to an "deceptive marketing" campaign around the Xbox One. As part of the approval announced this week, Machinima--which has some 400 million subscribers--will need to clearly disclose when it has paid its "influencers" to promote a product.

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"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," reads a line from the FTC's statement.

How did we get here? According to the FTC's complaint, which was made public in September 2015, Machinima paid YouTubers--called "influencers"--to post videos that spoke positively about the Xbox One and some of its games. This is not necessarily a problem, but the FTC alleged that the YouTubers "failed to adequately disclose" that they were being paid for what were presented as objective videos.

A pair of YouTubers were paid $45,000 between them to publish two video reviews each, both of which beamed positive messages about Xbox One without stating that they were paid endorsements.

"When people see a product touted online, they have a right to know whether they're looking at an authentic opinion or a paid marketing pitch," FTC Bureau of Consumer Protection director Jessica Rich said in a news release back in September.

Machinima will not pay a monetary fine, but Polygon reports that, now that this order has been approved, any future violation will be subject to a penalty of up to $16,000.

Microsoft bears no material responsibility in this case, as the FTC said, "these appeared to be isolated incidents that occurred in spite of, and not in the absence of, [Microsoft] policies and procedures designed to prevent such lapses."

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