
Warner Bros Settles FTC Charges It Failed to Disclose It Paid Online Influencers - kelukelugames
https://www.ftc.gov/news-events/press-releases/2016/07/warner-bros-settles-ftc-charges-it-failed-adequately-disclose-it
======
a_small_island
>"Instead, according to the complaint, Warner Bros. instructed influencers to
place the disclosures in the description box appearing below the video.
Because Warner Bros. also required other information to be placed in that box,
the vast majority of sponsorship disclosures appeared “below the fold,”
visible only if consumers clicked on the “Show More” button in the description
box. In addition, when influencers posted YouTube videos on Facebook or
Twitter, the posting did not include the “Show More” button, making it even
less likely that consumers would see the sponsorship disclosures."

So a disclosure in the notes box below a video is not enough. I wonder what
this will mean for the guys from CSGOLotto [0] who are caught up in a
seemingly worse controversy of non disclosure and more.

[0] [https://www.youtube.com/watch?v=_8fU2QG-
lV0](https://www.youtube.com/watch?v=_8fU2QG-lV0)

~~~
ggrothendieck
The HN title misquotes the actual FTC site's title. The FTC title says it
"failed to adquately disclose", not that it "failed to disclose". Omitting the
word adequately changes the meaning substantially. In fact, WB did disclose
the payment but it was the manner in which they disclosed it that the FTC
objected to -- not the failure to disclose it.

~~~
Retric
Discloser requires more than posting a footnote in a random small town
newspaper readership 12. You must clearly communicate to the recipient and
failure to adequately disclose is failure to disclose.

~~~
protomyth
Actually, several laws for notification can be fulfilled by "posting a
footnote in a small town newspaper readership 12". Its quite an amazing thing
seeing the small things in the local paper of record.

~~~
jdmichal
Are you talking about the announcements typically required for public
hearings? Because relating such announcements to disclosure is kind of
strange. Disclosure is additional information about the message being
conveyed, typically relating some bias that the recipient should be aware of
before making decisions. Announcements, on the other hand, are precursors to
the thing that actually matters, which is the hearing.

~~~
protomyth
I'm talking about more than public hearings, there are many disclosure laws
that require using the paper of record for a county or other area.

------
Bjartr
>Warner Bros. is barred from failing to make such disclosures in the future

So were they not "barred from failing to make" these mandatory disclosures
previously?

I wonder what the world would be like if the laws people had to follow had
this same pattern of "You broke the rules? Well your punishment is that you
now have to really actually follow the rules next time."

~~~
jgmrequel
They were barred before - I think this language means next time they are
caught, it'll hopefully be much worse.

~~~
r00fus
So a slap on the wrist...

~~~
rayiner
A slap on the wrist is appropriate here. There were apparently 5.5 million
views of sponsored content. The total value of that commerce is a few thousand
dollars in AdSense revenue.

~~~
AdmiralAsshat
The calculation (admittedly a difficult one) should not be based on the amount
of AdSense revenue generated, but the revenue generated by the number of
people who bought the game based on Youtube_Personality's recommendation.
Shadows of Mordor cost $60 at launch. Let's say just 20,000 people went out
and bought the game as a result. Suddenly, the value of that fraudulent
promotion is $1,200,000.

~~~
300bps
_Shadows of Mordor cost $60 at launch. Let 's say just 20,000 people went out
and bought the game as a result. Suddenly, the value of that fraudulent
promotion is $120,000._

20,000 x 60 = $1,200,000

~~~
AdmiralAsshat
Missed a zero. Thanks for the correction!

------
ebbv
Unfortunately this doesn't include what kind of fine WB has to pay, that will
come out later. I hope it's stiff. This kind of deception has to cost more
than it benefits the company if they are going to be deterred from it.

Unfortunately at the moment this kind of thing is going on constantly, and
even when there are disclosures that it's sponsored "reviews" the disclaimers
are usually as subtle as possible.

Video games became the biggest entertainment industry in the last 20 years and
as a result a lot of greedy people with no moral compass have flooded into it
to cash in.

~~~
mtgx
> I hope it's stiff.

I doubt it's more than a few million dollars if that. I wonder why the FTC
even had to settle for this. Warner was clearly in the wrong. Government
agencies are way too quick to settle these days. Sure, a trial would be much
harder, but also much more effective in stopping corporate illegal activities
in the future. Cheap settlements are just the cost of doing business and I
doubt they serve as any deterrent at all.

~~~
jonnathanson
Typically speaking, a federal regulatory body's enforcement calculus follows
this procedure:

1\. How big is the target company?

2\. How scary are its lawyers?

3\. Do we expect the company to put up a fight?

4\. Is the fight worth it? (e.g., Are there important precedents at stake? Can
we make an example of the company in question?)

Ninety-nine times out of a hundred, the desire to pursue the fight in court
fizzles out at Step 4. (And sometimes there's an ancillary Step 4a: "How many
other battles are we fighting right now?")

I'm not being glib here; I'm just being cynical, but realistic. This is pretty
much how my friends at various agencies have described it to me. It doesn't
seem too farfetched, if perhaps a bit simplified.

~~~
cmdrfred
If only the DEA was so limited in its resources that it had to come to that
sort of calculus. We'd have a lot less people who committed victimless crimes
in prison.

~~~
vkou
They do, it's just that most of the people put away for drug crimes don't have
deep pockets and good legal council.

------
AJ007
Interesting fact, this is the first public reference to Pewdie Pie in an FTC
action, but the FTC commissioner referred to him during a keynote speech back
in 2015.
[https://www.ftc.gov/system/files/documents/public_statements...](https://www.ftc.gov/system/files/documents/public_statements/804731/150928nadaspeech.pdf)

------
a3n
[https://en.wikipedia.org/wiki/Payola](https://en.wikipedia.org/wiki/Payola)

------
gnicholas
Does anyone know where to report violations like this? I've seen many in the
past, and I've tried using the FTC report a violation tool, but none of the
categories seem to hit this. Too bad, because crowdsourcing the detection of
these violations would make the FTC's job a lot easier!

~~~
cookiecaper
This is how the business of online promotion works. I had a first-in-its-niche
company that was copied by spammers and seriously outcompeted with this kind
of under-the-table promotion, which I had, to that point, refused to perform
myself. And my company hurt substantially because of it (though it was
ultimately destroyed by a legal threat from a Fortune 100); went from the only
provider to third or fourth place, despite indisputable superiority to the
spammy, pump-and-dump competitors.

The reality of online promotion is that if you want to win, you have to play
the game. That means paying for placement in link rings and astroturfing hard.
It means ignoring official advice from all platform providers as
disinformation. Critical to the survival of any company is amassing a large
multi-million dollar war chest before a lawsuit comes knocking, because the
lawyers will be taking their pound of flesh, especially if you're going
against a corporate bully that is more than happy to spend tens of millions of
dollars just to teach you that they're not to be defied by the peons. Doesn't
matter what the law _actually_ says, only big companies can afford to fight.

This all being the case, I seriously doubt the FTC will make a real dent in
undisclosed promotion, no matter how aggressive they get. Undisclosed
promotion probably makes up 30% of the content on the web.

This case is likely as simple as FTC going after WB mostly because they knew
they could get some good revenue out of them.

~~~
Bartweiss
> It means ignoring official advice from all platform providers as
> disinformation.

This is a painful and revealing comment, and your post certainly isn't the
only place I've seen it. The standard wisdom is that advice from platforms is
either meaningless, or a guide to exactly how far you can go down their "not
recommended" paths without catching a ban.

I'm not sure that there's any decent answer to this; all the evidence suggests
that for some markets dishonesty and misleading promotion are the best
possible tactics. What good are corporate ethics if the first person to act
unethically will outperform all honest competitors?

------
Kenji
Does anyone really trust online game reviews? Game media is corrupt to the
bone and the first thing I think when I see a positive review is that it was
bought. Besides, the culture of game media is often far, far away from true
gamer culture. That's why I often just watch raw gameplay footage, then I can
make up my mind myself. I think this is a non-issue.

 _“Consumers have the right to know if reviewers are providing their own
opinions or paid sales pitches,”_

I think consumers should start to learn to think for themselves and stop
relying on the state, bans and fines.

~~~
SCdF
> Does anyone really trust online game reviews?

It depends on what you mean by "trust", and "game reviews".

I have varying levels of trust for different individuals, which you can factor
into how much you take what they're saying at face value.

I don't think the concept of a game review is particularly helpful: they are
all subjective opinion pieces. They could be essays (game reviews), rants or
opinion pieces (what TB does say), raw gameplay (lets plays) or live
interactive exploration of the title (Twitch).

You can combine those various streams, along with "lesser" (read "easier")
user generated content like Reddit threads and what-not, to help you come to
some kind of conclusion before a purchase.

> the first thing I think when I see a positive review is that it was bought

I feel for you, that can't be a nice way to think about things. I'm not sure
where you're getting that kind of cynicism from honestly, but if the issue is
as widespread as you say I feel like there is a pretty good expose in that.

> Besides, the culture of game media is often far, far away from true gamer
> culture.

That's a really odd statement. I'm not sure what "true gamer culture" is, but
there is a good chance I come from a completely different country to you, have
a completely different background and life experiences to you. Except I play
video games. I'm not sure declaring some "true gamerness" test and segregating
people who fit your expectations and those that don't is particularly healthy.

I think especially these days many people play games, to varying levels, on
varying platforms. Games are not holy relics to be cherished by the anointed
few, they are pieces of culture to be enjoyed (or not I suppose, if they're
junk) by everyone.

> I think consumers should start to learn to think for themselves and stop
> relying on the state, bans and fines.

I'm not sure those are mutually exclusive ideas. People should think for
themselves, obviously. But since basically every opinion you've ever had is
based on the media you read / experienced it in, trying to push media toward
being a cultural experience and not an advertisement is important too.

Especially in a world where everyone is hyper critical and distrustful of
media (especially media that contains opinions they don't agree with), it's a
boon to promote yourself as a game reviewer / critic / lets player who is not
corrupted by the almighty dollar.

~~~
Kenji
_That 's a really odd statement. I'm not sure what "true gamer culture" is,
but there is a good chance I come from a completely different country to you,
have a completely different background and life experiences to you. Except I
play video games._

Not sure if you're serious or trolling here. As true gamer culture I describe
people with a real appreciation for games (should be obvious). People who
actually play and enjoy games (or create and mod them). Not people who are
faking it for money, not people who are trying to push agendas onto gamers,
just plain old gamers. And trust me, these are surprisingly rare in game
media. You can call it unhealthy, the truth is often unhealthy. You can choose
to remain ignorant about it, and patronize people like me. The fact is: Go out
and ask kids, go and ask the people who play the most. They don't give a damn
about game media and they are not involved in it at all. They just play their
games.

~~~
SCdF
> Not sure if you're serious or trolling here.

I'm completely serious. I genuinely don't understand how you can pick some
arbitrary rules and decide that the "other people" are not "true xyzers" and
thus are invalid.

> As true gamer culture I describe people with a real appreciation for games
> (should be obvious). People who actually play and enjoy games (or create and
> mod them).

Great, I know lots of those people! I'm one of those people! Honestly, I don't
really know anyone who doesn't enjoy games (who plays them that is).

> Not people who are faking it for money,

Great! Imagine if there were laws to make sure those people had to disclose
when, why and how they were making money associated with games!

> not people who are trying to push agendas onto gamers

I'm trying really hard not to project the rest of the internet on to you,
because I don't know you, and I'm sure you're a lovely person. It sounds
though, like you're upset with certain "social" complaints that some people
have had with games lately, i.e. being upset about women being over sexualised
in games, or what not.

With that in mind: I agree with a reasonable amount of that commentary. Does
that make me not a "true" gamer? What is your yardstick here? More
importantly, why does your opinion on who a "true gamer" is matter?

> And trust me, these are surprisingly rare in game media

I don't see it. And I don't see how you can see it either honestly. I feel
like if the entire games media scene was bought and paid for by game companies
someone would have actually written about it. This stuff generally gets
reported on pretty well when it happens (see: Jeff Gerstman being fired for
giving a low score to Kayne & Lynch, the Warner Bros issue we're talking about
right now, etc). There are always people looking to expose something to make a
name for themselves, and if anything like this actually existed someone would
have done just that. And no, I don't count KIA / whatever ramblings.

It sounds more like a bunch of people are saying things you don't agree with,
and so you've decided they aren't "true gamers" so you can brush off what
they're saying without having to really think about it.

> You can call it unhealthy, the truth is often unhealthy. You can choose to
> remain ignorant about it, and patronize people like me. The fact is: Go out
> and ask kids, go and ask the people who play the most. They don't give a
> damn about game media and they are not involved in it at all. They just play
> their games.

I'm not "choosing to remain ignorant", I'm disagreeing with you and what
you're saying. Hopefully politely, apologies if it's not coming off that way.

~~~
Kenji
_It sounds though, like you 're upset with certain "social" complaints that
some people have had with games lately, i.e. being upset about women being
over sexualised in games, or what not._

If you mean with "social" anti-social complaints like hating and bullying
white males [0] and the like, then yes! I oppose everything that resembles
stuff like that all day every day and do not consider anyone who does not
condemn this a true gamer. Because what they do is no longer about games, they
just use game media as a vessel to spread their poison into the fun-loving
gamer community.

 _Great! Imagine if there were laws to make sure those people had to disclose
when, why and how they were making money associated with games!_

No, I don't want to solve everything with laws. I don't want to be babysat by
the state. The community should just shun the the dishonest people, foster a
positive culture of honesty and build proper review facilities. We don't need
the state for that. In fact, I'd argue we need anything but the state for
this.

 _It sounds more like a bunch of people are saying things you don 't agree
with, and so you've decided they aren't "true gamers" so you can brush off
what they're saying without having to really think about it._

Oh, yeah, totally, how did you know? I have many tiny little boxes with labels
in my brain, and every time someone says something I don't like, I put them
into one and lock it firmly shut so I never have to think about it again. I
have no shred of intellectual integrity inside me and thrive on ignorance. Me
making a distinction between true gamers and those who have hijacked some of
its media for hateful messages is a manifestation of my hate for reality.

[0]
[http://www.gamasutra.com/view/news/224400/Gamers_dont_have_t...](http://www.gamasutra.com/view/news/224400/Gamers_dont_have_to_be_your_audience_Gamers_are_over.php)

------
chrischen
Are the receivers of the money liable for any penalties? Seems like they
should be equally liable, if not more so.

------
MichaelBurge
This seems like an overreach of the government's power more than anything. And
if anyone is to blame, it seems like the responsibility should be on the
Youtube creator to do the disclosure and not Warner Bros(so they should fine
"PewDiePie" rather than Warner Bros), since they ultimately broadcast the
noncompliant material.

It seems like this happens in the newspapers all the time. I'm actually
unfamiliar with the FTCA. I reread pg's essay[1] and I guess the main
difference with sponsored content in the newspapers is that the reporters
don't directly benefit from the sponsored content. I don't know - there's an
awful lot of sponsored content on news sites nowadays, and I always imagined
the reporters did it for the money.

Is it actually illegal to take money to publish sponsored content in a
newspaper without providing a notice of this?

[1]
[http://www.paulgraham.com/submarine.html](http://www.paulgraham.com/submarine.html)

~~~
zuminator
The rule isn't that it's illegal to take money. The rule is that “unfair or
deceptive acts or practices” are illegal with respect to advertising.
Obviously that's a very broad stroke, so there are guidelines[1] put out by
the FTC which give examples of what is considered fair and what's deceptive.
In particular the disclosure should be part of the ad, not located somewhere
else that a party might not have access to (e.g. YouTube videos are often
embedded. You won't see the description box in that case, and will have no
indication that you're watching paid content.) It's WB's product; they're the
one's who needed to make sure their paid ads were compliant.
Kjellberg/PewDiePie is based in Sweden, so the FTC guidelines don't concern
him except insofar as he's doing commerce in the US.

[1] [https://www.ftc.gov/system/files/documents/plain-
language/bu...](https://www.ftc.gov/system/files/documents/plain-
language/bus41-dot-com-disclosures-information-about-online-advertising.pdf)

~~~
icanhackit
> Kjellberg/PewDiePie is based in Sweden, so the FTC guidelines don't concern
> him except insofar as he's doing commerce in the US

FWIW he resides in Brighton, England.

