We told you before of the great big YouTuber Payola scandal – in which several high profile YouTubers were caught not disclosing that some videos they made under the guise of opinion were actually sponsored ones, made for profit. It happened regarding Battlefield 4, and also in the moments before the release of the Xbox One.
Close to the launch of Microsoft’s newest console, the large, popular and powerful Machinima network had a paid campaign for its many prolific clients; if they made a particularly positive video about the Xbox One and Microsoft, they’d get paid extra – but they weren’t allowed to disclose a thing. Some of Machinima’s ‘Tubers did just that.
The entire scandal’s come to the fore again, thanks to the US’ Federal Trade Commission slamming it in a press release, saying that it’s deceitful marketing (via Kotaku). They’ve come to a settlement, meaning it’s unlikely that Machinima, and hopefully other networks, try this sort of underhanded nonsense again.
“Under the proposed settlement, Machinima is prohibited from similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.”
More than 84 YouTubers with a collective reach of nearly 12 million subscribers accepted the agreement to evangelise the Xbox One. Two particular YouTube channels have been fingered; “SkyVSGaming” and “TheSyndicateProject.”
The brief was to create two videos to hype up the Xbox One:
Respondent directed each influencer to include in their first video review:
- Montage of past Xbox 360 footage, talking over a game you’re playing on the Xbox 360, etc.
- Two to three talking points detailing what features you’re looking forward to in the Xbox One
- Announce that you will be playing Ryse on the Xbox early
- Video will be at least 2 minutes long in length
- Video showcases Microsoft products in positive light
Respondent directed each influencer to include in their second video review:
- Capture Ryse gameplay in Machinima office
- Two to three talking points detailing what you like about the game
- Video will be at least 2 minutes long in length
- Video showcases Microsoft products in positive light
Says the FTC:
“Respondent paid influencer Adam Dahlberg $15,000 for the two video reviews that he uploaded to his YouTube channel “SkyVSGaming.” In his videos, Dahlberg speaks favorably of Microsoft, Xbox One, and Ryse. Dahlberg’s videos appear to be independently produced and give the impression that they reflect his personal views. Nowhere in the videos or in the videos’ descriptions did Dahlberg disclose that Respondent paid him to create and upload them. Dahlberg’s first video received more than 360,000 views, and his second video more than 250,000 views.
Respondent paid influencer Tom Cassell $30,000 for the two video reviews that he uploaded to his YouTube channel “TheSyndicateProject.” In his videos, Cassell speaks favorably of Microsoft, Xbox One, and Ryse. Cassell’s videos appear to be independently produced and give the impression that they reflect his personal views. Nowhere in the videos or in the videos’ descriptions did Cassell disclose that Respondent paid him to create and upload them. Cassell’s first video received more than 730,000 views, and his second video more than 300,000 views.”
That’s a great number of people that were effectively deceived – which is exactly what the FTC has taken umbrage with.
“In numerous instances, Respondent has failed to disclose, or disclose adequately, that the individuals who posted the reviews were compensated in connection with their endorsements,” wrote the FTC. “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.”
According to the FTC’s paperwork, “Each violation of such an order may result in a civil penalty of up to $16,000,“a fine that’s likely levelled at Machinima. It’s also worth noting that while the FTC considers Microsoft and its media agency responsible for the ethical misconduct, they’ve both been cleared because they have nominal policies against this sort of deception.
“…while Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies…staff considered the fact that these appeared to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures designed to prevent such lapses.”
This sort of flagrant deception makes it hard to take some YouTubers seriously – but hopefully this will nip these practices in the bud.
It’s actually about ethics in games journalism indeed.
Last Updated: September 3, 2015
Brady miaau
September 3, 2015 at 10:25
Good. But I wonder, for each uncovered, how many remain hidden?
Admiral Chief Returns
September 3, 2015 at 10:36
42
Brady miaau
September 3, 2015 at 10:41
Ah, yes. A long, dark time tea indeed.
Alien Emperor Trevor
September 3, 2015 at 10:25
I’m sorry. There can’t be a marketing person in the world, especially working for MS and their media agency with all their policies and procedures and ethics training, who doesn’t know that this is unethical.
Although technically, it’s about ethics in video game advertising. 😉
RinceThis
September 3, 2015 at 11:29
GG, no wait 0_O
Ottokie "Yahtzee"
September 3, 2015 at 10:26
$16k fine does not really seem adequate. I think there are bigger numbers behind the scenes and the 30K paid for the youtuber and 16k fine is probably pocket money to them for all the “fake” positive reviews and hype.
Hammersteyn
September 3, 2015 at 10:27
I read and watch stuff by you people and
Angry Joe
Jim Sterling
Ben “Yahtzee” Croshaw
Totalbiscuit
and more recently VideoGamerTV
The rest can get into the sea
Ottokie "Yahtzee"
September 3, 2015 at 10:28
Ben has a sexy IGN 😛
Brady miaau
September 3, 2015 at 10:33
Ben “Yahtzee” Croshaw
Is good. Honest. And has his own opinions and the world be damned. The others, I tried, never really got into. In fact, I distrust Angry Joe, somehow.
Admiral Chief Returns
September 3, 2015 at 10:36
I like Good Mythical Mornings
Dutch Matrix
September 3, 2015 at 10:39
Mythical… Like your sex life? It’s all wonderful and awesome and sadly non-existent? (I am sorry. I haven’t trolled anybody like this in weeks/days. I am slipping… My sponsor will be so disappointed in me…)
Kromas untamed
September 3, 2015 at 10:49
Jim Fucking Sterling son!
Thank god for Jim.
Hammersteyn
September 3, 2015 at 10:52
Jim Fucking Sterling son, funny episode that
Kromas untamed
September 3, 2015 at 10:54
Ever since he went independent he is free to tell it like it is even more than when he was at escapist. I trust him almost completely.
Hammersteyn
September 3, 2015 at 11:20
I trust him fully
https://33.media.tumblr.com/c2762c656ed7521f0b1a56ea0ee54525/tumblr_ndxyambtw21s3ewmvo1_500.gif
HvR
September 3, 2015 at 11:30
#Fuckonami
Kromas untamed
September 3, 2015 at 11:32
#Pullthelever
Kromas untamed
September 3, 2015 at 10:50
For story I also watch FrankieonPC1080p and for laughs I watch Sovietwomble.
Hammersteyn
September 3, 2015 at 10:51
I’ll check them out. But I try to keep the subs down. I’m already getting as little work as possible done
Kromas untamed
September 3, 2015 at 10:53
Frankie mainly deals in DayZ and other survival simulators but he crafts a decent story and that makes it fun to watch. Womble has a clan called Zero Fucks and they are funny as hell specially when he adds some video editing in.
Aries
September 3, 2015 at 11:04
JackFrags is also funny, when him, Levelcap and Matimio do that squad ups, not sure if Frankie still plays with them, or but they all have cool games the play
40 Insane Frogs
September 3, 2015 at 13:09
For me it’s Lagz, Totalbiscuit, TechRaptor and the KotakuInAction reddit/voat group. That’s all I need. The rest can go jump in a fire.
CypherGate
September 3, 2015 at 13:22
Angry Joe is awesome lol I always watch his Rambo the Game Angry Review lol hilarious lol Oh and Fransis and Boogie isnt too bad either.
Dutch Matrix
September 3, 2015 at 10:36
Lazygamer.net. The only people I come to for video game news. You people do some stellar work, really.
But allow me to say, once again, that of all you great people, Darryn Bonthuys shall forever be The Batman of this site!
Hammersteyn
September 3, 2015 at 10:43
Also, how little faith do you have in your own console if you feel the need to resort to bribing people to promote your product?
Guild
September 3, 2015 at 10:46
Well MS obviously knew beforehand they would lose the console race to Sony after the poor reception it received with it’s DRM plans so to make the console relevant they had to use more deceitful ways to try influence the public. 😛
Ir0nseraph
September 3, 2015 at 10:56
Calling it a race is flattering to MS 😛
Guild
September 3, 2015 at 10:56
Well it started as a race but turned into a 1 horse show
Geoffrey Tim
September 3, 2015 at 11:06
I…I like the Xbox One. I’m using it a little more than my PS4 at the moment.
Admiral Chief Returns
September 3, 2015 at 11:17
LACIST
Guild
September 3, 2015 at 11:18
Using it to prop open the door doesn’t count.
Alien Emperor Trevor
September 3, 2015 at 11:07
It’s a dog & pony show!
Kromas untamed
September 3, 2015 at 10:48
$15,000 for 4 minutes of video praising MS.
SIGN ME UP!
Dutch Matrix
September 3, 2015 at 10:49
Bugger ethics, right?
Kromas untamed
September 3, 2015 at 10:51
Isn’t that South Africas national Slogan?
Alien Emperor Trevor
September 3, 2015 at 10:52
Kromas for president!
Kromas untamed
September 3, 2015 at 10:55
If you elect me for presidency I vow to have 100mb fiber in every house by the end of my tenure!
Also free KFC bucket for every voter!
I got it in the bag boys!
Brady miaau
September 3, 2015 at 10:56
How long do you plan your tenure to be?
Kromas untamed
September 3, 2015 at 10:57
5 years. Cause after those 5 years I need to catch up on 5 years worth of backlog due to me presidenting the crap out of this country.
Alien Emperor Trevor
September 3, 2015 at 11:06
Exactly what I was wondering, last thing we want is a Kromasgabe.
Admiral Chief Returns
September 3, 2015 at 10:59
Got my vote
Dutch Matrix
September 3, 2015 at 10:54
Only our politician’s…
Admiral Chief Returns
September 3, 2015 at 10:49
Ditto
Bagel
September 3, 2015 at 11:00
Kotaku reporting about collusion. and deceit.
HAHAHAHAHAAHAHHAHAA thats some funny shiat. ^_^
Mabenito
September 3, 2015 at 11:15
Mr. Regulate
RinceThis
September 3, 2015 at 11:30
Amazing, nothing from Pieter yet?
HvR
September 3, 2015 at 11:32
Busy hiding his $500 glorify MS paycheck before SARS hear of this.
RinceThis
September 3, 2015 at 11:44
lol
40 Insane Frogs
September 3, 2015 at 13:06
Lol, so that’s where all those “Ryse is the best” videos came from. Oh you, youtubers!
Ragnar The Vengeful
September 3, 2015 at 14:41
Your company killed 500 people due to terrible quality control, you have been cleared of wrongdoing since you have a policy against killing people.