The Federal Trade Commission (FTC) recently settled a case with Warner Bros. Home Entertainment Inc., regarding the FTC's claim that Warner Bros. failed to adequately disclose that it paid people ("influencers") to post positive video game videos for the game Middle Earth: Shadow of Mordor. The FTC claims that during the sponsored videos were viewed more than 5.5 million times. Warner Bros. also advised and assisted the influencers in how to promote the game in a positive manner and avoid disclosing negative issues with the game.
Under the settlement, Warner Bros. is prohibited from failing to disclose the use of influencers and cannot misrepresent sponsored content.
The FTC's case against Warner Bros. is not surprising. The FTC has recently taken aim against the practice of companies failing to disclose when online reviews and promotions are actually sponsored by the company. This is a big area of focus because people rely on online reviews when making purchase decisions. When the reviews are not independent, but instead are simply another form of advertising, the FTC requires that the sponsorship be adequately disclosed to consumer.