Tag: FTC

Machinima in hot water for Xbox campaign

Posted on September 4, 2015 by - News

xbox-one-featured-imageThe outfit which helped market Microsoft’s Xbox One, is in trouble with the regulator for paying up to US$30,000 for video endorsements.

The FTC is looking into Machinima’s antics as part of an alleged deceptive advertising investigation.

Machinima paid two Xbox One endorsers a total of US$45,000 for producing YouTube videos. It also promised to pay a larger group of so-called online influencers $1 for every 1,000 page views, up to $25,000, the FTC said.

The company did not ask the influencers to disclose the payments, the agency said.

The failure to disclose payments for what the FTC called “seemingly objective opinions” violated the FTC Act. The agency’s endorsement guides, updated in 2009 to cover online endorsements, require disclosure of paid endorsements.

In a proposed settlement with the FTC Machinima is prohibited from engaging in similar marketing campaigns and would be required to clearly disclose paid endorsements.

Jessica Rich, director of the FTC’s Bureau of Consumer Protection said that when people see a product touted online, they have a right to know whether they are looking at an authentic opinion or a paid marketing pitch.

Machinima insists that it does not do that sort of thing now. The FTC’s complaint stems from company activity in 2013, before a change in management in March 2014.

“Machinima is actively and deeply committed to ensuring transparency with all of its social influencer campaigns. We hope and expect that the agreement we have reached today will set standards and best practices for the entire industry to follow to ensure the best consumer experience possible.”

Machinima and its online influencers were part of an Xbox One marketing campaign, managed by Starcom MediaVest Group, the ad agency hired by Xbox maker Microsoft, the FTC said in a press release. Machinima guaranteed Starcom that the influencer videos would be viewed more than 19 million times.

A small group of influencers were given access to pre-release versions of the console before its launch in late 2013, the agency said. Two paid endorsers, one receiving $15,000 and the second receiving $30,000, produced YouTube videos that garnered nearly 1 million page views combined.

The FTC has closed its investigation into Microsoft and Starcom, it said. While both companies shared responsibility for the failure to disclose endorsements, the commission’s staff considered the payments to be “isolated incidents” that happened in spite of, not in the absence of, policies designed to prevent them, the agency said.

Both companies also moved quickly to end the Machinima payments, the FTC said.

Google “fiddled its figures” – official

Posted on March 20, 2015 by - News

330ogleThe Federal Trade Commission (FTC) considered taking Google to the cleaners in 2012 for abusing its monopoly position but in the end decided against the move.

That’s according to a report in the Wall Street Journal, which said the five FTC commissioners decided not to pursue their findings.

FTC investigators discovered proof that Google abused its monopolistic position and used techniques that harmed competitors such as TripAdvisor.

The reason the FTC did not pursue the case was because it was going to be hard for the poor dears to prove its case. They also felt that Google was “popular”.

Google has a different angle on the findings claiming there was no need for the FTC to take action because it isn’t evil.

The European Commission (EC) doesn’t appear to be shying away from investigating Google, despite a series of high profile spinning events Google organised towards the end of last year.

The FTC discovered that Google interweaved its own products into search results, skewing objective results.

 

T-Mobile profited from SMS scams

Posted on July 2, 2014 by - News

shut-up-and-take-my-moneyThe US Federal Trade Commission claims mobile phone service provider T-Mobile USA, made hundreds of millions of dollars by placing charges on mobile phone bills for unauthorised “premium” SMS subscriptions.

T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month, the FTC claims.

The watchdog said that T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.
It appears to have gotten away with it by burying the information in the phone bill where it was unlikely to be seen.

FTC Chairwoman Edith Ramirez said it was wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent.

She said that the FTC wanted to make sure that T-Mobile repays all its customers for these crammed charges.

The FTC has alleged that because such a large number of people were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorised by its customers.

The refund rate likely significantly understates the percentage of consumers who were scammed.
The complaint against T-Mobile alleges that the company’s billing practices made it difficult for consumers to detect that they were being charged.

T-Mobile’s full phone bills, which can be longer than 50 pages, made it nearly impossible for consumers to find and understand third-party subscription charges.

The FTC charged that T-Mobile refused refunds to some customers, offering only partial refunds of two months’ worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers – without providing accurate contact information to do so.
Sometimes T-Mobile claimed that consumers had authorised the charges despite having no proof that they had.