Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupportContact
Search
Close

The Scrutiny Continues: Social Media Activities Continue to Draw Consumers and Consumer Protection Enforcement Alike

By Sheila Millar & Tracy Marshall on July 25, 2016
Email this postTweet this postLike this postShare this post on LinkedIn

Since we last wrote about how marketers can craft social media policies to offer engaging promotions while meeting the scrutiny of regulators, social media has continued to be a popular venue for marketers to reach consumers. The Federal Trade Commission (FTC) has also kept the spotlight on compliance with the FTC Guides Concerning Use of Endorsements and Testimonials in Advertising, targeting companies that fail to meet obligations to disclose “material connections” when working with influencers to promote products in social media. Some recent FTC actions are summarized below.

  • In July 2016, Warner Bros. Home Entertainment, Inc., settled with the FTC over charges that the company deceived consumers by running a marketing campaign for the video game Middle Earth: Shadow of Mordor in 2014 without properly disclosing that online influencers, including the prominent PewDiePie, were allegedly paid from hundreds to tens of thousands of dollars to generate “buzz” for the game. These influencers posted gameplay videos on social media sites including YouTube without, according to the FTC, incorporating clear statements that the videos were sponsored. Although Warner Bros. did require some disclaimers about sponsorship, this information was generally only visible if consumers clicked on a button to reveal more details in a description about the video. The company allegedly also pre-approved at least one video without adequate sponsorship disclosure.
  • In June 2016, the FTC settled claims with SmartClick Media LLC, doing business as “Doctor Trusted,” relating to a certification program that allegedly represented to consumers that products sold on websites were independently evaluated by doctors using their medical expertise, when in fact they were not. The company used seals on websites that appeared to operate independently from SmartClick, including health-product review sites, but which were in fact operated by SmartClick. Although SmartClick had hired freelance doctors to conduct some reviews, these reviews were allegedly cursory, and the seals were sold to—and appeared on—800 websites. The FTC’s order imposed a judgment of $603,588 on the defendants, which was to be suspended upon their payment of $35,000.
  • In March 2016, the FTC finalized an order settling charges that Machinima, Inc. engaged in deceptive advertising by failing to disclose that it paid “influencers” to post YouTube videos that endorsed Microsoft Xbox One games as well as the platform. The FTC first announced the proposed order in September 2015, alleging that the company paid endorsers $15,000 and $30,000 for posting videos on the popular video playing platform that resulted in 250,000 views and 730,000 views, respectively. The settlement did not involve a financial payment by Machinima, but the company agreed not to violate the FTC’s deception policy in the future. Microsoft and its advertising agency both received closing letters in 2015 that found them partially responsible, but the FTC concluded that these companies’ failures were “one-offs.”

*          *          *          *          *

The social media landscape is no longer new. Companies are expanding social media initiatives with good reason – because it’s where the eyeballs are. But all companies, large and small, must take care to assure that their social media initiatives, particularly those involving influencers, comply with the FTC’s guidelines on endorsements.  A word to the wise: The FTC staff, just like consumers, is looking at social media sites like YouTube, Pinterest and others. The difference is that the FTC is on the lookout for violations of its rules and guidelines.

Photo of Sheila Millar Sheila Millar

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has…

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has been involved in a variety of audit and compliance projects, including, among other issues, privacy and data security audits, and is experienced in providing crisis management legal support to a variety of national and international companies and associations.

Ms. Millar is a frequent speaker on regulatory and public policy matters, and has authored many articles. Ms. Millar is one of the vice chairs of the International Chamber of Commerce (ICC) Marketing and Advertising Commission, and chair of its Working Group on Sustainability, where she spearheaded the development of the ICC Framework Guides on Environmental Marketing Claims.

Ms. Millar is AV® PreeminentTM Rated by Martindale-Hubbell and for the eigth consecutive year was selected by her peers for inclusion in The Best Lawyers in America® 2018 for her work in practicing Advertising Law. She has also received the distinguished honor of Advertising Law “Lawyer of the Year” 2014 in Washington, DC by Best Lawyers®, and was awarded Advertising and Marketing Lawyer of the Year USA by Finance Monthly for their Finance Monthly Global Awards 2017.

Read more about Sheila MillarEmailSheila's Linkedin Profile
Show more Show less
Photo of Tracy Marshall Tracy Marshall

Tracy Marshall counsels international and domestic for-profit and non-profit clients on a range of privacy, data security, advertising, promotions, and intellectual property matters. She also advises on general corporate and transactional matters.

Tracy assists clients with compliance and advocates on their behalf. She …

Tracy Marshall counsels international and domestic for-profit and non-profit clients on a range of privacy, data security, advertising, promotions, and intellectual property matters. She also advises on general corporate and transactional matters.

Tracy assists clients with compliance and advocates on their behalf. She is a Certified Information Privacy Professional (CIPP/US) through the International Association of Privacy Professionals (IAPP) and helps clients implement privacy, data security, and security breach response programs, develop internal and public-facing privacy policies to comply with applicable laws, respond to cyber and data security incidents, and manage relationships with service providers and third parties. Tracy advises on structuring and conducting email and text messaging campaigns, sweepstakes, contests, and other promotions, and she helps clients protect and enforce their intellectual property rights.

In addition, Tracy counsels clients on corporate matters and assists with structuring and negotiating a variety of transactions, including licensing, marketing, and outsourcing arrangements.

Tracy is frequently invited to speak at privacy, data security, telecommunications, and advertising conferences and is a contributor to Keller and Heckman’s Consumer Protection Connection blog and Beyond Telecom Law Blog.


To learn more about Tracy’s practice areas, click here.
Read more about Tracy MarshallEmailTracy's Linkedin Profile
Show more Show less
  • Posted in:
    Other
  • Blog:
    Consumer Protection Connection
  • Organization:
    Keller Heckman
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
The Library at LexBlog
  • About LexBlog
  • The Field We Built
  • Library at LexBlog
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo