The Federal Trade Commission is considering changes to its powers which would allow it to crack down on “fake positive reviews or manipulating reviews by suppressing bad ones”.
In a new statement from the US government body, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said: “We’re updating the guides to crack down on fake reviews and other forms of misleading marketing, and we’re warning marketers on stealth advertising that targets kids.
“Whether it’s fake reviews or influencers who hide that they were paid to post, this kind of deception results in people paying more money for bad products and services, and it hurts honest competitors.”
The new guidelines would also warn social media platforms that host reviews, such as YouTube and Instagram that their tools were not robust enough to ensure proper disclosure of paid content, and could open them up to potential liability.
A revision to the guidelines would now bring virtual influencers, commonly known as V-Tubers, under the FTC’s guidelines.
V-Tubers are typically animated characters that are being controlled live by a creator, allowing them to react and emote to live messages and events as part of their stream.
Controversial YouTuber PewDiePie (real name Felix Kjellberg) was criticised in 2014 for failing to adequately disclose that he had been paid by Warner Brothers to post positive impressions of Middle: Earth Shadow of Mordor.
This led to the FTC reaching a settlement with Warner Bros, which banned them from failing to disclose similar paid content. This was an early case that set the standard for influencer marketing in the US.
Laws in the UK are much stricter, with heavy fines in place for influencers found to be posting non-disclosed content for which they have been paid.
Unlike in most territories, simply placing a hastag in the description noting that the video is an ad isn’t enough, creators must verbally disclose that the content is paid for by a third party at the start of the video.