The United States Federal Trade Commission (FTC) struck a settlement with video network Machinima over allegations that influential YouTube broadcasters were improperly paid to endorse Microsoft’s Xbox One. While the mainstream media is bashing Microsoft because that’s just the way any news regarding the company is presented, we went ahead and actually read the FTC settlement. You’ll be happy to know that Microsoft was cleared of any wrongdoing. It was Machinima who wanted to capitalize on the company’s Xbox One reveal troubles.
Just to go into the issue a bit, videos were aired as part of an advertising campaign for Microsoft and its advertising agency, Starcom Mediavest Group. The FTC determined that neither Microsoft nor Starcom were part of Machinima’s actions. The settlement reads, “The failures to disclose here appear to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures designed to prevent such lapses. Microsoft had a robust compliance program in place when the Xbox One campaign was launched, including specific legal and marketing guidelines concerning the FTC’s Endorsement Guides.”
So after an in-depth investigation, the FTC determined Microsoft and Starcom didn’t violate any Endorsement guides. Now, let’s move on to what the FTC said about Machinima. The FTC settlement will forbid Machinima from running videos without properly disclosing when the broadcaster has been compensated for endorsing a product. FTC Consumer Protection Bureau chief Jessica Rich said, “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.”
Under the terms of the settlement, Machinima will be required for the next 30 years to clearly disclose when a video includes paid endorsements. The company will also be required to set up policies to ensure proper labeling and disclosure of paid endorsements and, for the next 5 years, maintain all documents related to the settlement available to the FTC. Microsoft and Starcom weren’t subject to any penalties. It was all Machinima.
Source: The Register
Xian was a regular ICXM contributor between 2015–2017, publishing 162 articles across game reviews, Windows and PC, and Xbox news. Their work focused on hands-on reviews, platform commentary, and breaking-news reporting during the Xbox One X launch year and Microsoft’s wider Play Anywhere / UWP gaming initiative.