The Federal Trade Commission says it settled charges with video game Machinima, which was accused of pushing videos of people endorsing Microsoft’s Xbox One without disclosing they had been paid.
The settlement requires Machinima to stop similar “deceptive” videos in the future, and must reveal when people posting videos are getting paid for their endorsement.
“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, in a statement released Wednesday.
According to the FTC, Machinima and a group of influential YouTube users worked with Microsoft’s advertising agency, Starcom MediaVest Group, on a marketing campaign for the Xbox One. Two of the “influencers” cited by FTC paid as much as $30,000 for the endorsing videos. However, none of the users disclosed they received payment for their feedback. The FTC also claims a larger group of “influencers” were paid $1 for every 1,000 views on YouTube.
Reports of the partnership first surfaced in January 2014, months after Microsoft launched the Xbox One. According to a report from Ars Technica, video partners were receiving payments for posting any content related to the Xbox One. In a subsequent statement, Microsoft said it was unaware of the payment arrangements and urged Machinima to disclose the payments.
Follow Brett Molina on Twitter: @brettmolina23.
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