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FTC: Video reviews of Xbox One were deceptive

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It’s no surprise that gamers excited about the release of a new gaming console would go online to see what people are saying about it. But they might be surprised to learn that some people who posted video reviews were paid to say positive things—and didn’t disclose that. That’s what the FTC says happened in the days leading up to the launch of Microsoft’s Xbox One, according to a complaint filed today by the agency.

Machinima, the operator of a popular YouTube network with 3 billion monthly video views, paid two influential gaming bloggers to create videos touting the new Xbox One and three new games and didn’t require them to disclose that they were paid for their favorable reviews. The bloggers posted four videos that had more than 1.6 million views. Machinima later recruited and paid more people to upload positive video reviews–again without requiring a disclosure. This generated another 300 videos and 30 million views in a five-week period.

The law says reviewers should disclose their connection to a company. Why? Because a connection could affect the credibility a consumer gives to the review. Wouldn’t you have a different opinion of a recommendation if you knew the reviewer was paid to tout the product?

When you’re reading or watching online reviews, look for a disclosure. If it’s there, it should be easy to notice. In the case of a video, it has to be on the screen long enough for you to read and understand it.

Think about the source of the review and who’s behind it. Is it from an individual user or an impartial, expert organization? Weigh reviews from several trusted sources.

Want to know more? Watch this video about online reviews and recommendations.

Blog Topics: 
Money & Credit


Does that mean that mean financial compensation will be awarded to anyone that purchased XBox One? Even if it's a small dollar amount? Unfair marketing!

You can read about the proposed settlement between the FTC and Machinima in the press release.

Just because it's says it good not true check consumer affairs and complaints, teach kids computer safety before they buy

From the settlement proposal (thanks, Bridget) it appears that Machinima won. No fine, no restitution, no penalty at all except a "Sorry... won't happen again (until the next time you catch us)". Should have at least been forced to refund payments received for illegally promoting the x-box!

Under the proposed settlement, Machinima is prohibited from similar deceptive conduct in the future. It also prohibits Machinima from misrepresenting in any influencer campaign that the endorser is an independent user of the product or service being promoted. It also requires the company to prominently disclose any material connection between the endorser and the advertiser, and prohibits Machinima from compensating any influencer who has not made the required disclosures.

Isn’t this already the law though and what they were supposed to be doing? Or is the law not quite clear yet on these new sorts of issues which can make it hard to truly enforce ? How can I report a tech website that’s uploded a video review on YouTube of a high end TV but hasn’t disclosed it’s a paid/sponsored ad anywhere in the video or on YouTube, they just put the word sponsored in a tweet. In the video all they say is “Sony sent us this tv” which doesn’t remotely disclose that it’s a paid ad & he knows it.

Thanks you very much. ...

I loved the Xbox 360 and so I got the Xbox One, I regret it now I have nothing but problems with it.

I got something to say xbox gold membership says earn up to 1500 dollars in in free games okay but if you request a check from Xbox vip gold membership and they say they will send you a check that you requested instead of free games I requested a check from xbox VIP gold membership and I didn't get anything from them.

You can report this to the FTC. You can provide information about the company, what it promised, and what you got. Go to to enter the details. The information you give goes into a database that law enforcement uses for investigations.

Did they say somewhere that they would give people a check for the value of the free games if requested ?

So if someone leaves a review that isn't completely factual but based on their belief and isn't an employee of the company or paid for the comment. Would the company be at fault? For example if they said it was made in the USA on a linked in post when in fact it didn't meet the FTC rules to qualify as made in USA. How would this be treated.

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