The US Federal Trade Commission has agreed a final consent order with Machinima about the network’s future paid endorsements.
In September last year the FTC ruled that Machinima was guilty of ‘deceptive advertising’ after it found that the network paid some YouTubers up to $30k to produce Xbox One videos around the time of the console’s launch.
The contracts prevented negative discussion about the console, and the terms of the deal – which effectively meant they were advertisements – was not disclosed to viewers. Microsoft itself was not criticised.
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,” the FTC said.
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.”
No financial penalty was imposed, although any future breaches will result in a $16k fine.