To the surprise of absolutely no one. Then again, this is old news (I know it broke a while ago), but it's good to see someone getting spanked. I call BS that these are isolated incidences. Sure, direct cash exchange is probably pretty rare, but claiming that publishers and hardware manufacturers don't heavily incentivize good reviews through advertisement revenue and perks offered to those who play ball is delusional. This shit goes back to when gaming was for pathetic losers (read: the 90s, and even before that).A California-based online entertainment network has agreed to settle Federal Trade Commission charges that it 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, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.
Under the proposed settlement, Machinima is prohibited from similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their 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,” said Jessica Rich, Director of the Bureau of Consumer Protection. “That’s true whether the endorsement appears in a video or any other media.”
According to the FTC’s complaint, Machinima and its influencers were part of an Xbox One marketing campaign managed by Microsoft’s advertising agency, Starcom MediaVest Group. Machinima guaranteed Starcom that the influencer videos would be viewed at least 19 million times.
In the first phase of the marketing campaign, a small group of influencers were given access to pre-release versions of the Xbox One console and video games in order to produce and upload two endorsement videos each. According to the FTC, Machinima paid two of these endorsers $15,000 and $30,000 for producing You Tube videos that garnered 250,000 and 730,000 views, respectively. In a separate phase of the marketing program, Machinima promised to pay a larger group of influencers $1 for every 1,000 video views, up to a total of $25,000. Machinima did not require any of the influencers to disclose they were being paid for their endorsement.
The order settling the FTC’s charges 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 the company to prominently disclose any material connection between the endorser and the advertiser, and prohibits Machinima from compensating any influencer who has not made the required disclosures. In addition, it requires the company to follow up within 90 days of the start of a campaign to ensure the disclosures are still being made.
FTC staff also has sent a letter to Microsoft and Starcom closing its investigation into the two companies in this case. According to the letter, while Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies, Commission staff considered the fact that these appeared to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures designed to prevent such lapses. The companies also quickly required Machinima to remedy the situation after they learned that Machinima was paying influencers without making the necessary disclosures.
The Commission vote to issue the complaint and accept the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Oct. 2, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be submitted electronically.
The FTC appreciates the assistance of the New York State Attorney General’s Office in bringing this case. The Commission recently issued updated questions and answers providing guidance regarding online endorsements and testimonials.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
You only have to look at the not-at-all-hilarious joke that E3 has become. It used to be a show where publishers put on their A-game in a desperate bid to impress one area of gaming journalism they had little power over. Now it's straight-out run by the guys begging for good marks, except if you aren't willing to give those marks, you don't get in the door (both the front or the exclusive areas). So the begging is more like having one open hand and a gun in the other.