Markets Wired

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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