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FTC to start clamping down on paid-for posts that don't clearly disclose they're sponsored content

By midian182 ยท 7 replies
Aug 8, 2016
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  1. Last month the Federal Trade Commission (FTC) reached a settlement with Warner Bros over a complaint that the company paid online influencers to promote 2014 game Shadow of Mordor. While such a practice isn’t illegal, the problem was that many reviewers failed to disclose that it was sponsored content. Now, the FTC has told Bloomberg that it plans to crack down on similar posts.

    “We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” said FTC Ad Practices Division Deputy Michael Ostheimer “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

    Rather than explicitly declaring they’ve been paid for their services, many celebrities and influencers merely put hashtags such as #ad, #sp, or #spon in a video’s description or beneath a post, something the FTC says isn’t always enough to make people aware they’re watching what is essentially an ad.

    “If consumers don’t read the words, then there is no effective disclosure,” Ostheimer said. “If you have seven other hashtags at the end of a tweet and it’s mixed up with all these other things, it’s easy for consumers to skip over that. The real test is, did consumers read it and comprehend it?”

    Ostheimer indicated that the FTC will be going after the companies who are paying for their products to be advertised, rather than those in front of the cameras, though it hasn’t ruled out charging a celebrity or influencer for deceptive advertising.

    “We hope by bringing these cases that we not only stop the marketer and influencer who didn’t have adequate disclosures previously, but also get the message out that other companies should have clear and conspicuous disclosures,” he said.

    The FTC going after these kind of posts is commendable; providing it hits repeat offenders with a punishment that dissuades them from doing it again. Warner Bros escaped with nothing more than a slap on the wrist for its actions – the FTC merely ordered the company to make sure that influencers understand they must clearly disclose when payments have been made in the future.

    Image credit: Ollyy / Shutterstock

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  2. hahahanoobs

    hahahanoobs TS Evangelist Posts: 2,007   +661

    I am totally ok with this. Well done.
    Evernessince likes this.
  3. Uncle Al

    Uncle Al TS Evangelist Posts: 3,205   +1,879

    BRAVO!!! The more teeth the FTC has, the better it can protect the consumer from so many of these unscrupulous companies and advertisers!!!
  4. Greg S

    Greg S TechSpot Staff Posts: 987   +422

    So now techspot will have to start putting sponsored on all those "news articles" that just promote things in their own store. Clearly companies are offering techspot incentives on the sales, and if not, it's highly deceptive advertising at the very least.
    mbrowne5061 and Joe 5mith like this.
  5. Squuiid

    Squuiid TS Enthusiast Posts: 44   +17

  6. Evernessince

    Evernessince TS Evangelist Posts: 1,918   +1,115

    I'm sure Ajit Pai will find a way to put a negative spin on this, after all most of his campaign funds come from the very companies he is supposed to oversee.
  7. SirGCal

    SirGCal TS Maniac Posts: 365   +136

    "The real test is, did consumers read it and comprehend it?"

    Don't they mean:

    The real test is, CAN consumers read it and comprehend it?

    Sorry, but I hold very little hope out for the average consumer today.
  8. Timonius

    Timonius TS Evangelist Posts: 647   +58

    :pokes head in room: Like all those sponsored Ghostbusters reviews saying it's a good movie :quickly runs away:


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