[Federal Register Volume 81, Number 136 (Friday, July 15, 2016)]
[Notices]
[Pages 46078-46080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16729]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 152 3034]
Warner Bros. Home Entertainment Inc.; Analysis of Proposed
Consent Order to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis to Aid Public Comment describes both
the allegations in the draft complaint and the terms of the consent
order--embodied in the consent agreement--that would settle these
allegations.
DATES: Comments must be received on or before August 10, 2016.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/warnerbrothersconsent online or on
paper, by following the instructions in the Request for Comment part of
the SUPPLEMENTARY INFORMATION section below. Write ``In the Matter of
Warner Bros. Home Entertainment Inc., File No. 152 3034--Consent
Agreement'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/warnerbrothersconsent by following
[[Page 46079]]
the instructions on the web-based form. If you prefer to file your
comment on paper, write ``In the Matter of Warner Bros. Home
Entertainment Inc., File No. 152 3034--Consent Agreement'' on your
comment and on the envelope, and mail your comment to the following
address: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580,
or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Linda K. Badger, (415-848-5151), FTC
Western Region, 901 Market Street, Suite 570, San Francisco, CA 94103.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for July 11, 2016), on the World Wide Web at:
http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 10, 2016.
Write ``In the Matter of Warner Bros. Home Entertainment Inc., File No.
152 3034--Consent Agreement'' on your comment. Your comment--including
your name and your state--will be placed on the public record of this
proceeding, including, to the extent practicable, on the public
Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a
matter of discretion, the Commission tries to remove individuals' home
contact information from comments before placing them on the Commission
Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
---------------------------------------------------------------------------
\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/warnerbrothersconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``In the Matter of Warner
Bros. Home Entertainment Inc., File No. 152 3034--Consent Agreement''
on your comment and on the envelope, and mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC
20580, or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If
possible, submit your paper comment to the Commission by courier or
overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before August 10, 2016. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``FTC'' or ``Commission'') has
accepted, subject to final approval, an agreement containing consent
order from Warner Bros. Home Entertainment Inc. (``Warner Bros.'' or
``respondent''). The proposed consent order (``proposed order'') has
been placed on the public record for thirty (30) days for receipt of
comments by interested persons. Comments received during this period
will become part of the public record. After thirty (30) days, the
Commission will again review the agreement and the comments received,
and will decide whether it should withdraw from the agreement and take
appropriate action or make final the agreement's proposed order.
This matter involves respondent's use of social media influencers
to advertise the video game, Middle Earth: Shadow of Mordor (``Shadow
of Mordor''). According to the Commission's complaint, Warner Bros.,
through its ad agency, Plaid Social Labs, LLC, hired individuals who
had earned reputations as video game enthusiasts on YouTube (``YouTube
influencers'') to post positive videos promoting Shadow of Mordor on
YouTube. The Commission's complaint alleges that these YouTube
influencers were given free access to a pre-release version of Shadow
of Mordor and cash payments often ranging from hundreds of dollars to
tens of thousands of dollars, if the videos they created about Shadow
of Mordor met certain requirements defined by Warner Bros. Among other
things, Warner Bros. required influencer videos to promote a positive
sentiment about the game, and not to disclose any bugs or glitches that
the game might have. Consequently, these videos were sponsored
advertisements, and did not necessarily reflect the independent
experiences of the individual YouTube influencers.
The complaint also alleges that while Warner Bros. instructed the
YouTube influencers to provide a disclosure that their videos had been
sponsored, it specified that the disclosure be written, and placed in
the description box
[[Page 46080]]
appearing below the YouTube videos. Warner Bros. did not require the
YouTube influencers to place a sponsorship disclosure clearly and
conspicuously in the video itself. Nor did Warner Bros. require that
the YouTube influencers be instructed to place the sponsorship
disclosure ``above the fold'' in the description box, or visible
without consumers having to scroll down or click on a link, as it had
for other promotional information about Shadow of Mordor. (See, e.g.,
Exhibit A-1) As a result, most YouTube influencers did not include any
sponsorship disclosures in their videos, and only placed their
sponsorship disclosures ``below the fold'' in the description box below
the video. Therefore, consumers had to click on a ``Show More'' button
in the description box and potentially scroll down before they could
see the sponsorship disclosure. As a result, consumers who watched
these YouTube videos were unlikely to learn that the videos were paid
promotions for Warner Bros.
The Commission's complaint further alleges that when YouTube
influencers posted their Shadow of Mordor videos for viewing on
Facebook or Twitter, consumers were even less likely to see these
sponsorship disclosures because such posts did not include the ``Show
More'' button. In addition, the complaint states that on at least two
occasions, the influencers disclosed only that they had been given
early access to the game, and did not adequately disclose that they had
also been paid to post the video.
According to the complaint, in numerous instances, YouTube
influencers did not disclose or adequately disclose that Warner Bros.,
through Plaid Social, offered compensation to the influencers in
exchange for creating and uploading gameplay videos as part of a Shadow
of Mordor advertising campaign. The Commission's complaint alleges that
these videos were false and misleading because they did not reflect the
independent opinions or experiences of impartial video game
enthusiasts. The complaint further alleges that the videos were
deceptive because they failed to disclose or disclose adequately that
the influencers who posted the videos were compensated in connection
with their endorsements.
The proposed order includes injunctive relief to address these
alleged violations and requires Warner Bros. to follow certain
monitoring and compliance procedures related to its use of influencer
campaigns.
Part I of the proposed order prohibits Warner Bros., in connection
with the advertising of any home entertainment product or service, from
misrepresenting in any influencer campaign that an influencer or
endorser of such product or service is an independent user or ordinary
consumer of the product or service.
Part II of the proposed order requires Warner Bros., in connection
with the advertising of any home entertainment product or service by
means of an endorsement, in any influencer campaign, to disclose
clearly and conspicuously a material connection, if one exists, between
the influencer or endorser and Warner Bros.
Part III of the proposed order sets out certain monitoring and
compliance obligations to ensure that Warner Bros., or any entity it
engages to conduct an influencer campaign, comply with Parts I and II
of the proposed order. These obligations include: Obtaining signed
acknowledgements from such influencers that they will disclose their
material connection to Warner Bros.; monitoring the influencers'
representations and disclosures; maintaining records of monitoring
efforts; and, under certain circumstances, terminating and ceasing
payment to influencers who misrepresent their independence, or fail to
properly disclose any material connection to Warner Bros. Part III
specifically provides that if Warner Bros. engages an entity to conduct
an influencer campaign, Warner Bros. must take steps to ensure that the
entity complies with this Part, and to monitor its compliance. If the
entity fails to comply with this Part, Warner Bros. must cease payment
to the entity until it cures any noncompliance. Furthermore, Warner
Bros. is required to disqualify the entity from conducting future
influencer campaigns upon a repeat incident, unless it reasonably
concludes that the entity's failure to comply was inadvertent.
Part IV of the proposed order contains recordkeeping requirements
for relevant documents.
Parts V through VII of the proposed order require the company to:
Provide copies of the order to certain personnel having
responsibilities with respect to the subject matter of the order;
notify the Commission of changes in corporate structure that might
affect compliance obligations under the order; and file compliance
reports with the Commission.
Part VIII of the proposed order provides that the order will
terminate after twenty (20) years, with certain exceptions.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the complaint or proposed order, or to modify the
proposed order's terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-16729 Filed 7-14-16; 8:45 am]
BILLING CODE 6750-01-P