Inside Sony/Deutsch LA Consent Decree:

FTC Cracks Whip on Endorsement Guidelines in Social Media

When the Federal Trade Commission’s (FTC) revised endorsement guidelines came out in 2009, there was a big uproar that the FTC would be prosecuting bloggers, when the reality is that the FTC has been very restrained in its enforcement of the guidelines. We have previously indicated several instances in which the FTC has spotted a violation but declined to do anything more than issue a warning:

Another FTC Checked Swing on Endorsement Guidelines Enforcement (3-30-2013)

FTC Watch: Another Endorsement Guideline Checked Swing (Apr-20-2014)

FTC Declines to Take Action Over Yahoo! Astroturfing (Sep-22-2014)

In the recent FTC Consent Decree’s with Sony and its ad agency Deutsch LA, for misrepresentations about the capabilities of the Sony Vita, the FTC singles out Deutsch LA for using its employees to promote the product via twitter without disclosing their connection.

:According to the complaint, about a month before the Vita debuted, one of Deutsch’s assistant account executives sent this email to all Deutsch employees

Fellow Deutschers –

The PlayStation Team has been working hard on a campaign to launch Sony’s all-new handheld gaming device, the PS Vita, and we want YOU to help us kick things off!

The PS Vita’s innovative features like 3G gaming, cross platform play and augmented reality will revolutionize the way people game. To generate buzz around the launch of the device, the PS Vita ad campaign will incorporate a #GAMECHANGER hashtag into nearly all creative executions. #GAMECHANGER will drive gamers to Twitter where they can learn more about the PS Vita and join in the conversation. The campaign starts on February 13th, and to get the conversation started, we’re asking YOU to Tweet about the PlayStation Vita using the #GAMECHANGER hashtag. Easy, right? . . .

In response, Deutsch employees used their personal Twitter accounts to hype the PS Vita through tweets like:

“One thing can be said about PlayStation Vita . . . it’s a #gamechanger”
“PS Vita [ruling] the world. Learn about it! us.playstation.com/psvita/#GAMECHANGER”
“Thumbs UP #GAMECHANGER – check out the new PlayStation Vita”
“This is sick . . . See the new PS Vita in action. The gaming #GameChanger”
“Got the chance to get my hands on a PS Vita and I’m amazed how great the graphics are. It’s definitely a #gamechanger!”

The complaint alleges that

Respondent has represented, directly or indirectly, expressly or by implication, that certain comments about the PS Vita reflected endorsements from persons who had used the PS Vita. Respondent failed to disclose that those comments were written by employees of Respondent, an advertising agency hired to promote the PS Vita. This fact would have been material to consumers in their purchasing decision regarding the PS Vita. The failure to disclose this fact, in light of the representation made, was, and is, a deceptive practice.

Under the consent decree Deutsch-LA is barred

from misrepresenting that an endorser of any game console product or video game product is an independent user or ordinary consumer of the product. In addition, the proposed order requires Deutsch LA to disclose a material connection, where one exists, between any endorser of a game console product or video game product and Deutsch LA or other entity involved in the manufacture or marketing of the product.