When Microsoft’s Xbox One console was on the verge of release, a ton of video content about the console, as well as blog posts, previews, and all manner of media to get people excited about it. On Youtube, one of the bigger promoters of the Xbox One’s capabilities, games, and services was the Machinima group, and just after the launch it was revealed that the company was paying their Youtube partners to promote the Xbox One with positive coverage, and cautioned them to not say anything negative in their videos. Machinima was taken to court by the US Federal Trade Commission this year and the case has finally closed with an out-of-court-settlement.
The charges related to the court case alleged that Machinima had deceived consumers with a false and misleading marketing promotion for Microsoft’s console, even though they themselves had been hired by Starcom MediaVest on behalf of Microsoft to start the promotion in the first place. The agreement between Starcom and Machinima was for the console itself as well as positive coverage for three launch titles.
There’s a portion of the transcript of the FTC’s argument copied below, which was brought before the court, that Machinima itself was responsible for the ensuing debacle. While Microsoft and Starcom were responsible for the marketing campaign, the FTC argued that neither company should be held responsible, as both have policies that try to avoid this kind of mess in the first place.
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.
While the details of the settlement haven’t been made public in totality (as these things usually are), one of the requirements is that Machinima and its partners now adhere to a new rule that that any promos are clearly disclosed, to refuse to pay for those that aren’t, and to check in on campaigns to make sure that the disclosures haven’t vanished.