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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. Mr. Hutchins started his legal career in Cheyenne, Wyoming as a law clerk for the district court judges. Mr. Hutchins then entered private practice with a Wyoming based litigation and business law firm. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and municipal law. The State of Wyoming hired Mr. Hutchins from Alaska to represent the State of Wyoming in the national tobacco arbitration and act as its tobacco settlement attorney. While in that position, as a hobby, he developed an enforcement unit for consumer protection for Wyoming residents. Mr. Hutchins moved to Colorado in 2016 and founded Harmony Law, LLC. Harmony Law is primarily engaged in civil litigation. It is also a general practice firm in the areas of business law, estate planning, consumer law and family law. Harmony Law is active in all state and federal courts throughout Wyoming and Colorado.

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