Machinima Pays NYAG $50,000 Over Undisclosed Endorsements

Los Angeles-based Machinima has paid a penalty of $50,000, in a settlement with the New York Attorney General, over the use of paid, undisclosed endorsements on its gaming content network. According to New York Attorney General Eric T. Schneiderman, earlier this month, Machinima paid gaming expert influencers to endorse Microsoft's Xbox One, paying two of those endorsers $15,000 and $30,000 for producing YouTube videos, and another larger group of influencers a total of $25,000 for views on videos where they endorsed the Xbox One. According to the NYAG, the posts by influencers gave the impression that their videos were independently produced, and they never disclosed Machinima was offering compensation for those videos. The NYAG said that doing so violated a number of laws in New York, as well as FTC rules which prohibit the deceptive practice of endorsing a product or service, that fails to disclose material connections between the endorser and the sponsoring advertiser.