Dodgy Xbox deals with YouTubers
Now, for some dodgy practices, concerning people getting paid to say nice things about a product on the sly. It looks like Machinima paid YouTubers tens of thousands of dollars to promote the Xbox One launch in a very positive light, without actually declaring their work was actually an advertising deal.
The Federal Trade Commission found that Machinima paid a bunch of YouTubers tens of thousands to talk up the launch of Microsoft’s Xbox One, and at no point did anyone declare that the endorsements were actually a rather lucrative deal.
As part of the agreement, the videos had to "showcase Microsoft products in positive light". You can imagine that there's a host of popular YouTubers who talk about make-up and clothes and the like, also on the make like this.
A YouTuber called Syndicate bagged a lovely $30,000 for running sneaky adverts, while SkyVsGaming got $15,000 in a deal. Neither disclosed that they were being paid by Machinima, the streaming company.
Machinima were throwing their money around like no-one's business, paying tens-of-thousands to people to create videos that "could not contain anything negative or disparaging regarding Machinima, Xbox One, or any launch title" and "keep confidential at all times all matters relating to [the] agreement."
This of course, saw the FTC saying that these promotions were not impartial, "false and misleading" and not independently produced. They continued: "In numerous instances, [Machinima] has failed to disclose, or disclose adequately, that the individuals who posted the reviews were compensated in connection with their endorsements."
"This fact would be material to consumers in their purchasing decisions regarding Xbox One and the Launch Titles. The failure to disclose this fact, in light of the representations made, was, and is, a deceptive practice." Cheeky!
You can read the full report as a PDF here.