If you saw a video from a YouTube gamer praising the Xbox One during its launch in 2013, that could have been the result of a marketing campaign that failed to disclose itself upfront to customers. The Federal Trade Commission has now entered into a settlement with the company in charge of that campaign, Machinima, claiming that it engaged in deceptive conduct.
The FTC said:
"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."
Under the terms of the settlement, Machinima is now prohibited from engaging in similar conduct in the future, and they must make sure that any YouTube "influencers" clearly disclose they are being compensated for endorsements by the company. Microsoft was also investigated as part of this report, but the FTC said today that while it was "responsible for the influencers' failure to disclose their material connection" it added that this particular situation appears to be an isolated incident and has closed its case against Microsoft.
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