The @FTC is suing @Google and @iHeartMedia after on-air personalities promoted the #Pixel4 phone as if they were owners or users of the phones themselves.
Here’s what’s going on… 🧵
#CreatorEconomy #CreatorEconomyLaw
Here’s what’s going on… 🧵
#CreatorEconomy #CreatorEconomyLaw
The FTC is pursuing the claims based on activity from October 2019 and 2020 alleging false endorsement claims that constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
They are joined by state attorneys general from Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas.
Here's the background from the FTC complaint, alleging false endorsement claims:
🤔 Google, through a media buying agent, paid iHeartMedia more than $2.6 million to have the ads recorded and broadcast in both English and Spanish language versions.
🤔 Google, through a media buying agent, paid iHeartMedia more than $2.6 million to have the ads recorded and broadcast in both English and Spanish language versions.
🤔 Google also spent $2 million with 11 smaller radio networks to have the ads recorded and broadcast.
🤔 E-mails were sent between radio personalities and Google's media agent for approvals to customize messages based on the radio personality's own life (which they approved).
🤔 In October 2019, a few iHeartMedia employees raised concerns with the use of "I" and first-person experience for products they hadn't used. Google and their media buyers pushed back writing in an email that it's "not feasible" to provide a product ahead of its launch.
🤔 Ads ran over 22,000 times between October 2019 and December 2019 across iHeartMedia and non-iHeartMedia stations.
🤔 In January 2020, Google ordered more advertisements to be recorded by different personalities. iHeartMedia employees again raised the issue of not having actual product experience. Google pushed back again, and instead pushed documentation about the features and the devices.
🤔 Ads ran over 6,000 times between Feb and March 2020 across iHeartMedia and non-iHeartMedia stations.
What's next? The FTC is seeking to impose the following:
✋ For 10 years, iHeartMedia & Google must ensure all corporate officers and directors as well as all employees, agents, and representatives aware of the order if they are involved in paid product endorsement activities.
✋ For 10 years, iHeartMedia & Google must ensure all corporate officers and directors as well as all employees, agents, and representatives aware of the order if they are involved in paid product endorsement activities.
Perhaps they could make this a required training for all current employees, and an additional part of employee onboarding.
✋ For 10 years, iHeatMedia and Google will have to deliver annual compliance reports showing how their activity meets compliance requirements.
✋ For 10 years, iHeartMedia will have to establish a records creation & retention process that documents all the information necessary for the FTC to audit their activities related to this matter.
Takeaways?
🎯 For brands: Ensure contracts with media buyers include indemnification clauses that cover violations of law.
🎯 For brands: Don't tell your media outlets (or buyers) to knowingly violate the law.
🎯 For brands: Ensure contracts with media buyers include indemnification clauses that cover violations of law.
🎯 For brands: Don't tell your media outlets (or buyers) to knowingly violate the law.
🎯 For broadcasters: Don't let brands dictate decisions that you know are best for your audience.
🎯 For spokespersons: Don't back down if you think there's something wrong. Speak up and push back!
🎯 For spokespersons: Don't back down if you think there's something wrong. Speak up and push back!
Check out the full set of case files, including audio recordings of the ads 👉 ftc.gov/legal-library/…
Note: The state judgments also require them to pay $9.4 million in penalties.
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