FTC Launches Crackdown On YouTube Celebrities Over Undisclosed 'Pay To Play'


FTC Launches Crackdown On YouTube Celebrities Over Undisclosed 'Pay To Play'

The Federal Trade Commission (FTC) is turning the heat up on YouTube celebrity gamers in a new round of crackdowns on disclosure of advertising fees on social media. The FTC is concerned that the online celebrities are violating disclosure regulations while making a lot of money from their high subscription viewerships.

Over the past few years there has been an explosion of interest in watching videos of professionals and other playing video games and commenting on the action. What was once a bedroom past time is now serious business, earning YouTube celebrities hundreds of thousands of dollars a year.

Through investigating these violations, the authorities hope to entrench disclosure regulations permanently in the online community, a segment that has for long existed virtually unregulated.

The FTC is alarmed that some YouTube gamers are endorsing video games on a compensated basis without disclosing such facts. A specific situation that has sparked the regulator’s interest is in the case of the new horror video game “Dead Realm.”

The recently launched game was developed with YouTubers in consideration. Developers sought to make the game as fun to play as possible and also as intriguing to watch as was possible. To ensure this was the case, they invited the cream of YouTube celebrity gamers Tom Cassell (TheSyndicateProject), Adam Montoya (SeaNanners) and Evan Fong (VanossGaming).

These three celebrities then went on to publish videos of themselves playing the game while talking about how fun it was. They, however, failed to disclose their relationship with the game’s makers and that they were receiving payment for their relationship, against FTC regulations.

Mary Engle, associate Director of Advertising Practices at FTC said, "Generally speaking, if an advertiser or a marketer is paying someone to write favorable reviews, the reviewer needs to disclose that and that disclosure should be clear and conspicuous, and should be upfront and easy to see where the viewer won't miss it."

Engle added, "What we say is that it should be easily seen or viewed (or heard in the case of audio) by the consumer or by the viewer. It should be made within the endorsement message, and within the review. We don't prescribe particular words or phrases that need to be used, but some people might say 'this is a compensated review,' or 'I got this free to try.'"

The FTC does have the authority to investigate suspected fraud and make a determination whether the nondisclosure was made in violation of the FTC Act.

While this particular case involves only three celebrity gamers, the virtual video sharing platform is home to dozens more celebrities who do not disclose compensated endorsements. Though no one is against earning a living from making endorsements, authorities emphasize that relevant disclosures must be made in such cases, the failure of which would be fraudulent.

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