FTC’s crackdown on influencers is toothless.
YouTubers Trevor "TmarTn" Martin and Thomas "Syndicate" Cassell had a good thing going. They stream popular shooters like Counter-Strike: Global Offensive and the Call of Duty franchise to a combined 13 million YouTube subscribers. While they game, Martin and Cassell often encourage viewers to take their Counter-Strike gun skins and gamble them on the website CSGO Lotto for a chance to win more expensive skins.
They published videos with titles like HOW TO WIN $13,000 IN 5 MINUTES CS GO Betting and $24,000 COIN FLIP (HUGE CSGO BETTING!) + Giveaway that showed them betting expensive CS:GO weapon skins and winning thousands of dollars worth of rarer skins. The problem is that it turned out the pair had ownership stakes in CSGO Lotto and weren't upfront about the fact with their fans.
As part of the Federal Trade Commission's ongoing crackdown of online influencers, it reached a settlement with Martin and Cassell over their alleged abuse of their fan base. As part of the scheme, the two also paid other prominent YouTubers between $2,500 and $55,000 to promote CSGO Lotto. They didn't require those paid influencers to disclose their relationship to the company or its owners.
The FTC's settlement, made public today, isn't punitive. It's more of a warning. "The Commission order settling the charges requires Martin and Cassell to clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service," a prepared FTC statement read.
"Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts," acting FTC Chairman Maureen Ohlhausen said. "This action, the FTC's first against individual influencers, should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions."
The FTC signaled its intention to go after online influencers' lack of disclosure a year ago when it updated its endorsement guidelines. After the announcement, prominent companies like game publisher Electronic Arts took proactive steps to make sure its paid YouTubers were clear about their relationship with the company.
The case against Cassell and Martin proves the FTC will go after influencers who mislead their audience, but it also proves that the feds are being generous and understanding when it comes to the new rules. Despite some allegedly heinous actions, the YouTubers won't pay any fines or serve any kind of jail time. They just have to straighten up and disclose relationships going forward.
The FTC also said it had sent warning letters to 21 other prominent influencers, reminding them that they have to comply with the new disclosure regulations or face penalties. "Don't assume followers know about all your brand relationships," the FTC advised. "Don't assume disclosures built into social media platforms are sufficient. Don't use ambiguous disclosures. Don't rely on disclosures that people will see only if they click 'MORE.'"
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