Google Strikes $9.4 Million Settlement With FTC For Paying DJs And Influencers To Praise Phones They Never Touched

Legal Issues

from the artificial-enthusiasm dept

The FTC and four state attorneys general this week struck a $9.4 million settlement with Google over allegations that Google covertly paid celebrities money to promote a phone none of them had ever used.

The FTC’s announcement states that the agency had previously filed suit against Google and iHeartMedia for airing nearly 29,000 deceptive endorsements by radio personalities and influencers, promoting their use of and experience with Google’s Pixel 4 phone in 2019 and 2020. The FTC and state AGs said the DJs and influencers had never actually so much as touched the phones, violating truth in advertising rules:

“It is common sense that people put more stock in first-hand experiences. Consumers expect radio advertisements to be truthful and transparent about products, not misleading with fake endorsements,” said Massachusetts Attorney General Maura Healey. “Today’s settlement holds Google and iHeart accountable for this deceptive ad campaign and ensures compliance with state and federal law moving forward.”

Of course, this kind of obscured financial relationship is happening constantly, especially in the influencer space. But like most U.S. regulators, the FTC lacks the staff, finances, or overall resources to police this stuff with any meaningful consistency. So instead, they occasionally fire a warning shot over the bow of the biggest and worst offenders, in the hopes that it scares others into behaving.

The Pixel 4 is a three-generation old phone, so, as usual, any regulatory action on this kind of stuff happens pretty late, if it happens at all. It sounds like Google would have been fine if it had just had the influencers more generally imply that they loved the phone, and it was the phony first-person endorsements that got Google and iHeartMedia in trouble.

More generally, poorly or non-disclosed influencer marketing arrangements are everywhere, and the FTC’s simply too inundated with other responsibilities to take aim at the problem with any real consistency. Still, the agency issued warnings to 700 companies in 2021 that it was at least paying attention to the problem, something that can’t be said of previous incarnations of the agency.

Filed Under: disclosure, ftc, influencers, marketing, phones, regulatory enforcement
Companies: google