LOS ANGELES -- The Federal Trade Commission called out Warner Bros. Home Entertainment on Monday for paying YouTube creators to endorse the publisher's game Middle-earth: Shadow of Mordor.
In a settlement, the FTC said the entertainment company failed to adequately disclose it paid influencers "hundreds to tens of thousands of dollars" to create sponsored videos that only promote the game in a positive way.
The complaint alleges that Warner Bros. used its advertising agency Plaid Social Labs to hire these influencers, give them a free advance-release version of the game and have them post about it on YouTube and social media platforms.
Critics argue that when influencers post endorsement videos -- without disclosing they were paid to do the endorsement -- it is both unethical and a breach of the FTC's endorsement guidelines. The FTC ruled that all videos made by these influencers related to Shadow of Mordor are therefore "sponsored advertisements."
The fantasy rolep-laying game, released in 2014, is based in J.R.R. Tolkien's Lord of the Rings universe. Overall, the game was fairly well-received, including by Mashable, which listed it as one of the "top 10 must-play games of 2014."
Warner Bros. does not have to pay fines, but the FTC called on the studio to “[provide] each Influencer with a statement of his or her responsibility" to disclose endorsements clearly in the future.
“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement in the commission’s press release. “Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”
“Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”
When reached by Mashable, a Warner Bros. representative said: "Warner Bros. Home Entertainment always strives to be transparent with our customers and fans when working with social influencers, and we are committed to complying with the related FTC guidelines."
No particular influencer was named in the FTC settlement itself.
However, in its press release, the FTC did call out "wildly popular" PewDiePie (whose real name is Felix Kjellberg) as an example of one of the creators who Warner Bros. failed to disclose it paid.
The Swedish YouTuber -- who has 46 million subscribers to his channel -- posted about the game (below) in September of 2014.
In its description, PewDiePie provided a link to the game as well as the game's YouTube channel.
In all, sponsored videos for Shadow of Mordor were viewed 5.5 million times, the FTC said. About 3.7 million of those views came from PewDiePie’s sponsored video.
PewDiePie did not immediately respond to Mashable's request for comment.
This is not the first time YouTubers and companies have come under fire for deceptive sponsored content. Recently, a number of well-known, gaming-focused YouTube personalities got into trouble over videos relating to gambling in Counter-Strike: Global Offensive.
Earlier this year, in March, the FTC cracked down on department store Lord & Taylor for "deceptive use of native advertising." The Commission found that 50 "fashion influencers" were paid between $1,000 to $4,000 to post Instagram photos of themselves in a dress using the hashtag #designLab.
Last year, digital entertainment company Machinima also settled with the FTC over videos that promoted Xbox One.
With Shadow of Mordor, the FTC determined the influencer videos "are sponsored advertisements, and do not necessarily reflect the independent experiences of the individual YouTube Influencers."
Many on Twitter expressed their lack of surprise over the settlement.
Others said the FTC settlement has now exposes a bigger ethics problem as to whether YouTubers should be allowed to promote products without disclosing that it is indeed promotion.
The worst part about the Shadow of Mordor drama?
As one Twitter user said: "What makes this sad is that the game was already good."
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