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YouTube endorsements don't break guidelines, says FTC

Money for positive coverage is legal as long as disclosure is given

Companies who offer YouTube presenters money to cover their products in a positive way are not breaking guidelines, according to the Federal Trade Commission.

Spokesperson Betsy Lordan told Polygon that as long as full disclosure is given during a video, the procedure falls within federal advertising law.

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Lordan also stated that while breaking the FTC guidelines wouldn't instantly lead to sanctions, they could lead to a potential legal investigation.

"If an advertiser is not following these guidelines, there is no penalty," she explained. "But the FTC could send a warning letter and if the problem is not eventually resolved, the agency could opt to open an investigation.

"But the ultimate charge if the FTC decides to follow through would be a violation of the FTC Act (violation of federal advertising law) and not a violation of the guides."

While it isn't uncommon for YouTube presenters to agree to these types of deals, it is generally accepted that full disclosure within the video is the ethically correct procedure.

However, a recent Xbox One promotion via Machinima received criticism because, according to a leaked copy of the legal agreement, participants "may not say anything negative or disparaging about Machinima, Xbox One, or any of its games" and must keep the agreement confidential (i.e. must not state that the video is promotional in nature).

Microsoft later responded to this story, claiming it had asked Machinima to add public disclaimers to all videos published as part of the Xbox marketing campaign.

"Microsoft was not aware of individual contracts Machinima had with their content providers as part of this promotion and we didn't provide feedback on any of the videos," its statement read.

"We have asked Machinima to not post any additional Xbox One content as part of this media buy and we have asked them to add disclaimers to the videos that were part of this program indicating they were part of paid advertising."

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