You must disclose "influencers" in advertising

Posted by Clyde Hutchins | Nov 30, 2016 | 0 Comments

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.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Prior to opening Harmony Law, Mr. Hutchins worked in the Wyoming Attorney General's Office for several years where he developed a strong consumer protection enforcement unit. In that position he led over 120 investigations and enforcement actions under the Consumer Protection Act. He worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado, on consumer protection matters. Mr. Hutchins is also a contributing author to Consumer Protection Law Developments, Second Edition. Previous to his work in the Attorney General's Office, Mr. Hutchins was in private practice in Anchorage, Alaska where he was the chief litigator for a firm. Mr. Hutchins represented municipalities on various matters. Mr. Hutchins provided counsel to businesses and investment advisors regarding compliance with securities laws. He was also a bond lawyer and worked on municipal financing matters. Prior to that, Mr. Hutchins practiced civil litigation with a law firm in Cheyenne, Wyoming. Mr. Hutchins devotes his spare time to his family, traveling and enjoying the great outdoors.


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