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Lack of Disclosure Strikes Video Games as Warner Bros. Settles with the FTC

FTC-logoI’ve written pretty extensively about the need for proper disclosure and transparency in the world of geek blogging. Transparency is one of the things this site was founded on and it’s something I take seriously. We probably over disclose in the other end. But, better to be honest and forthcoming than be caught later on. There are pretty clear guidelines the Federal Trade Commission (FTC) has laid out as to what blogs/online personalities need to disclose when receiving goods or payments for endorsements, testimonials, and reviews.

It was announced Monday that the FTC has settled with Warner Bros. Home Entertainment over their promotion for the video game Middle Earth: Shadow of Mordor. hey failed to adequately disclose that the company paid influencers. This added up to thousands of dollars to post positive gameplay videos on YouTube and other social media. The game has a score in the mid 80s on Metacritic. The game was released in 2014 and altogether the promotion was viewed about 5.5 million times.

Shadow_of_Mordor_cover_artWarner Bros. through Plaid Social Labs hired the “online influencers” to create gameplay video and post it on YouTube as well as promote it on Twitter and Facebook. Named in the announcement was YouTube personality PewDiePie. It should be noted that his video currently says “this video was sponsored by Warner Brother” in the info section but was not verbally said in the video I watched. However, that specific set-up is specifically mentioned in the FTC’s release. The disclosure was hard to find, if present at all, for the videos on YouTube, Facebook, or elsewhere. Some reviewers only disclosed they received early access and in at least one instance Warner Bros. approved the video itself.

Warner Bros. paid anywhere from hundreds to tens of thousands of dollars on top of a free advance release copy of the game and told influencers to promote it. They then used those paid promotions to further promote their game without disclosing they were indeed paid promotion.

Warner Bros. is now barred from failing to make sure disclosures in the future and can’t “misrepresent that sponsored content.” They must also educate influencers about sponsorship disclosures, monitor sponsored influencers for compliance, and if need be terminate or withhold payment for non-compliance.

The decision by the FTC is open for public comment for 30 days, through August 10, 2016. At that time the Commission will decide whether to make the proposed consent order final. Those who want to submit comments can do so here.

This is the second time within a year that video games have caught the eye of the FTC. Last year Machinima was busted for similar issues and not disclosing payments to promote the Xbox One.

Almost American