Machinima is a popular Los Angeles based company that runs a network of more than 25,000 creators whose gaming videos appear on YouTube and other media platforms. Now, the FTC has settled charges with Machinima over paid Xbox One system and game reviews.
Earlier this year, Machinima was accused by the FTC because its influencers failed to properly disclose that they were being paid for seemingly objective opinions about Xbox one system and games.
It was the part of marketing campaign, which was being managed by the software giant’s advertising agency, Starcom MediaVest Group. According to a report by the FTC, Machinima guaranteed Starcom Group that the “influencer” videos would be viewed not less than 19 million times.
Director of the FTC’s Bureau of Consumer Protection, Jessica Rich, said in a statement:
“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. That’s true whether the endorsement appears in a video or any other media.”
Now, when the FTC has settled charges with Machinima, the company has been prohibited from similar conduct in the future and is required to make sure that its influencers adequately disclose when they have been compensated for the paid advertisements. It has not been charged any financial penalties in the settlement, but if it continues to do such things, then definitely the company will have to pay the penalty.
The FTC has settled charges with Machinima, and the company said in a statement:
“Machinima is actively and deeply committed to ensuring transparency with all of its social influencer campaigns…We hope and expect that the agreement we have reached today will set standards and best practices for the entire industry to follow to ensure the best consumer experience possible.”
The FTC has settled charges with Machinima, and has also sent a letter to Starcom and Microsoft, in which it wrote “as the advertiser, Microsoft bears responsibility for the influencers’ failure to disclose such material connections…” However, it has decided to take no action against them.