The United States Federal Trade Commission criticized YouTube group Machinima in a press release on Wednesday following an investigation into deceptive advertising.
This started back in 2013 with the release of the Xbox One. Microsoft had contracted Machinima to do some advertising work for them – pretty normal stuff.
What became questionable, however, was that Machinima then asked YouTube personalities to create Xbox One videos that, according to documents obtained by Kotaku, showcase Microsoft products in a positive light and offer talking points about the features the personalities are looking forward to on the system.
In short, Microsoft asked for advertising, but Machinima provided paid endorsements that were not disclosed as such.
Machinima and the FTC have reached a settlement that prohibits them from engaging in tactics like these, and ensures that their future videos will clearly disclose when endorsements have been paid for.
“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 video or any media.
After word got out in January 2014, Microsoft had Machinima mark the videos as paid advertising, providing a statement to Eurogamer, for example, saying that the company “was not aware of individual contracts Machinima had with their content providers are part of this promotion, and we didn’t provide feedback on any of their videos.”
Regarding Microsoft and the advertising agency it used to setup the relationship with Machinima, the FTC said that this seems to be more of an isolated incident and pointed to the company’s swift response as evidence.