YouTubers Paid Thousands For Positive Xbox One Coverage, FTC Finds

A recent FTC report has found that the prominent YouTubers were paid for positive coverage of Microsoft’s Xbox One system without disclosure. According to the FTC, the payments were part of a lucrative advertising deal with Machinima, a popular media and game streaming company. Multiple YouTubers were paid to be a part of an advertising campaign for the Xbox One.

In the FTC report, Machinima paid out tens of thousands of dollars to multiple YouTube creators but did not disclose they were part of the advertising deal. YouTuber Syndicate was paid $30,000, while YouTuber SkyVsGaming was paid $15,000 in the deal. Machinima then paid out a total of $25,000 to various YouTube channels to promote the Xbox One to their viewers as part of the deal. However, none of the promotions were disclosed as such. This is a clear violation of U.S. law prohibiting “deceptive advertising.”

The deal, managed by Microsoft’s advertising agency Starcom MediaVest group, prohibited the influencers from saying anything negative about the Xbox One or its launch titles.

As part of the deal, Machinima did not tell the YouTubers working on the campaign that they needed to disclose they were part of an advertising deal. As a result, anyone watching these videos were under the assumption that the opinions being expressed were impartial when, in fact, they were not. Instead, the videos and their content were bought and paid for in order to promote the Xbox One and its launch games, which isn’t in it of itself a bad thing, but not disclosing that information is a “deceptive practice.”

The FTC report also found that these incidents were isolated occurrences, specifically because both Microsoft and Starcom have regulations in place to prevent such a practice. Both companies quickly required Machinima to disclose the information once they were aware that the company was not disclosing the information publicly.

The campaign provided the social media influencers advanced copies of Xbox One launch titles, as well as early access to the hardware. Around the time this occurred, the Xbox One was finding itself in a maelstrom of bad publicity, especially after consumer backlash over several policies and practices about the upcoming Xbox One console were made public.

“When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch,” said Jessica Rich, Director of the Bureau of Consumer Protection. “That’s true whether the endorsement appears in a video or any other media.”

You can read the full report by the FTC regarding the Machinima Xbox One marketing campaign here.

[Image via Microsoft]