FTC Finds Machinima Guilty for Deceptive Xbox One Advertising
The Federal Trade Commission revealed Machinima was being paid to endorse the Xbox One in its YouTube vids as a part of a secret advertising campaign and that they're guilty of deceptive advertising.
In a secret deal with Microsoft, Machinima's YouTube personalities were being paid to promote the Xbox One. According to Polygon, the FTC filed a complaint and ruled that Machinima was deceptive in its advertising for the Xbox One. Machinima, having decided to settle with the FTC, must now clearly disclose when they've been paid to endorse a certain product.
"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."
In late 2013, a few popular YouTube channels, including SkyVSGaming and The Syndicate Project, were commissioned by Machinima to make videos about Ryse: Son of Rome, that painted the Xbox One, its launch titles and Microsoft in a positive light. Mind you, I thought Ryse was pretty bad (as was most of the Xbox One's launch lineup) and it was just basically a giant quick-time event. According to Microsoft and Machinima's 2013 agreement, the YouTube personalities weren't allowed to say anything negative about the Xbox One, its launch titles or Microsoft. Machinima's YouTube influencers were eventually paid $1 for every 1,000 views (a maximum of $25,000). Between Nov. 22-Dec. 31, 2013, more than 300 Machinima videos were uploaded as a part of the Microsoft endorsement campaign.
FTC spokesman Jay Mayfield said that after an order is in place and Machinima breaks it, they can get a civil penalty of up to $16,000.
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