Warner Brothers settles FTC charges over promotional payments to livestreamers like PewDiePie

In a push to market its The Lord of the Rings-based Middle-earth: Shadow of Mordor,” Warner Brothers failed to adequately disclose that it had paid some influential video game players up to tens of thousands of dollars to create gushing, promotional videos for the new title.

That finding was disclosed today as part of a settlement reached with the U.S. Federal Trade Commission. While Warner Brothers escaped any fines, it has to deal with the embarrassing revelations while promising to enact more disclosures in similar campaigns.

“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”

Paying for reviews is not illegal. However, the FTC has strict rules regarding the disclosure of such relationships so that consumers understand whether a review is truly independent or not. WB was essentially dinged for portraying many of these reviews as independent.

As part of the marketing campaign in 2014, WB hired a social media firm called Plaid Social Labs, which in turn hired a number of “online influencers” to create sponsored gameplay videos. In recent years, thanks to YouTube and Twitch, the audience for watching other people play video games has exploded, and turned some players like PewDiePie into massive international celebrities.

While the FTC settlement does not specify how much any individual was paid, it says the amounts ranged from “hundreds of dollars to five figures.” One can assume that PewDiePie likely fell at the higher end of that range. Indeed, of the 5.5 million YouTube views generated by these videos, the FTC noted that PewDiePie’s video accounted for 3.7 million views.

WB had almost total control over these videos.

In exchange for money and early access, players had to agree to give WB pre-approval and ownership of the videos. In addition, they had to promise to promote the videos on their social networks, include a “strong verbal call-to-action to click the link in the description box for the viewer to go to the [game’s] website to learn more about the [game],” remain positive while not revealing any bugs or glitches, and say nothing negative about WB.

The company tried to skirt FTC disclosure rules by telling its influencers not to put any sponsorship information in the video, but rather to put it far enough down in the YouTube description box that a consumer had to click on it to see the full text.

As part of the settlement, WB promises to ensure that such paid promotional arrangements are clearly disclosed in the future.