Warner Bros. Video Game Review Scandal Settled With FTC

Warner Bros. (NYSE:TWX) recently agreed to settle charges from the Federal Trade Commission that accused the company of failing to disclose paying prominent YouTubers for positive coverage of one of its video games. The Federal Trade Commission claims that the publisher was paying YouTubers to positively review the game Middle-earth: Shadow of Mordor without requiring disclosure of the payments by the reviewer. Released in 2014, the fantasy role-playing game is based in J.R.R. Tolkien’s Lord of the Rings universe.

Warner Bros. reportedly hired ad agency Plaid Social Labs to find online influencers to develop sponsored gameplay videos for the game, post them on YouTube, and promote them on social media sites. According to the complaint, WB paid thousands of dollars to each influencer and gave them a free, pre-release version of the game. Warner Bros.’ deal with the influencers stated a string of caveats to avoid showing the game in a negative light, including not expressing negative opinions or showing any glitches or bugs.

Warner Bros. also allegedly told the influencers to put disclosures in the description field of the videos instead of in the videos themselves. The FTC says disclaimers in the YouTube description were not enough. The disclaimer would not have been visible on videos watched through Twitter, Facebook, or other social media sources, since they do not appear alongside videos in embeds or on other platforms.

The videos earned more than 5.5 million views for Warner Bros., with more than half, or 3.7 million views, coming from influencer PewDiePie’s subscribers. Pewdiepie, a Swedish man named Felix Kjellberg, has become the single most subscribed user on Youtube and is making of tens of millions of dollars reviewing video games. PewDiePie has over 46 million subscribers to date. The company also paid other internet stars, including I Am Wildcat, Silentc0re and Siv HD.

Under the terms of the agreement, Warner Bros. is banned from failing to disclose similar deals in the future. The company is also banned from pretending that sponsored videos and articles are actually the work of independent producers.

Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement, “Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches. Companies like Warner Bros. need to be straight with consumers in their online ad campaigns.”

PewDiePie has since responded to the scandal, claiming, “Basically, all these news articles are using me as a clickbait, putting my name to shame when I didn’t even do anything wrong.” PewDiePie also says that he doesn’t agree that the videos are unethical.