Will The FTC Investigate People & Companies Paid By Facebook To Use Facebook Live?

from the seems-to-violate-their-standards dept

According to a document recently obtained by the Wall Street Journal, the social networking giant has signed as many as 140 contracts worth a total of $50 million.



The list of media outlets being paid by Facebook includes traditional players such as CNN and the New York Times, the Journal says, as well as digital-only publishers like Vox, Mashable, and BuzzFeed. The celebrities who are being compensated for creating live video include comedian Kevin Hart and chef Gordon Ramsay.



Some contracts are worth smaller amounts, while 17 of the deals Facebook has signed are worth more than $1 million, according to the document obtained by the Journal. Two media outlets are getting paid more than $3 million to create live video—BuzzFeed and the New York Times, and CNN is not far behind, with a reported payment of $2.5 million.

For example, the Journal says it has seen documents that show Facebook is paying Vine star John Paul Piques $119,000 to post at least five videos on its live-streaming service over the next two months. That’s the equivalent of $24,000 per video. And he is just one of about two dozen other Internet celebrities and video stars who have signed similar deals. The newspaper says the highest-paid independent video performer appears to be Ray William Johnson, who developed a following for a YouTube show called “The Equals Three Show,” in which he makes fun of viral videos. He could make as much as $224,000 over the next six months.

The question you need to ask is whether knowing about that gift or incentive would affect the weight or credibility your readers give to your recommendation. If it could, then it should be disclosed.

Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.



You don’t necessarily have to use words to convey a positive message. If your audience thinks that what you say or otherwise communicate about a product reflects your opinions or beliefs about the product, and you have a relationship with the company marketing the product, it’s an endorsement subject to the FTC Act.

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In the last few months, Facebook Live has certainly become "a thing." Launched just recently, it was suddenly everywhere -- from the pure (but very viral) joy of Candace Payne and her Chewbacca mask to the live streaming of the tragic aftermath of Philando Castile being shot by a police officer in Minnesota. Of course, it appears that part of the reason why Facebook Live is getting so much usage isn't necessarily that it's a better product than its competitors, but rather that Facebook has been generously throwing around cash to all sorts of people and companies to get them to use the platform. Last month, it was reported that Facebook was paying many millions of dollars to big media players in exchange for them promising to broadcast via Facebook Live:Later in that article, it notes that BuzzFeed is getting $250,000 per month, for 20 Facebook Live videos each month. Good money if you can get it!Then, a few weeks later, another report came out, noting that Facebook was trying to buy successful YouTubers and Vine users away from those platforms by giving them cash to use the platform as well This kind of thing doesn't always work well, for a variety of reasons, but it appears that maybe it's actually succeeding this time. It'll be worth watching to see how well things go after the money runs out.Still, there's another question that is raised by these stories: are Facebook and all of these other companies and individuals running afoul of the FTC's social media guidelines? And might the FTC crack down? Now, to be clear, I'm skeptical about the FTC's rules because they create free speech questions. So far, the FTC's enforcement over its own guidelines has been, well, haphazard and seemingly arbitrary at best. However, the FTC did update its guidelines last year, and it seems like not disclosing these payments could create some problems, if the FTC decided to step in.The guidelines themselves seem more focused on "endorsements," but the question here is whether or not merely using the platform to post new videos is considered an "endorsement." Under the current guidelines, the FTC has a fairly loose standard of how the situation impacts the credibility given to the person or company by their audience:They also note that merelya product could be seen as an endorsement:While it's not a direct parallel, you could see how this is pretty close to the situation at hand. People viewing these videos are getting the message that these media companies and individuals approve of Facebook Live -- and yet many have not disclosed that they have a strong financial incentive to use the product. It seems like they may be in trouble if the FTC ever decides to take a look.The question, then, is whether or not the FTC will bother?

Filed Under: endorsements, facebook live, ftc, payments

Companies: buzzfeed, cnn, facebook, mashable