The Federal Trade Commission (FTC) announced on Tuesday a settlement in the first ever lawsuit brought against an advertising company for tweeting without disclosing business ties.
Alleging that Sony misled people over the Playstation Vita's advanced technology, the FTC accused the advertising company Deutsch LA of deceptively promoting the Vita on Twitter by not disclosing that their tweets were ads rather than genuine product reviews, reported The Hill.
Head of the FTC's western regional offices, Tom Dahdouh, said discreet social media advertising is a problem that "will only grow," and the agency will continue to expand its oversight to the Twitterverse.
"It's safe to say that this is an issue that continues to have the agency's attention," said Dahdouh. "... Especially as social media grows in increasing importance and, frankly, the increasing importance of social media in video game advertising."
Under current FTC guidelines, advertisers are required to "clearly and conspicuously" disclose when the agency pays seemingly random other people to publicly support the product.
In the complaint, the FTC managed to find an email from one of Deutsch LA's assistant account executives asking other employees to aid in the ad campaign by tweeting about the Vita using a certain hashtag.
"To generate buzz around the launch of the device, the PS Vita ad campaign will incorporate a #GAMECHANGER hashtag into nearly all creative executions," the employee wrote, according to the complaint. "[T]o get the conversation started, we're asking YOU to Tweet about the PlayStation Vita using the #GAMECHANGER hashtag."
Once employees tweeted without disclosing their association with Sony, their tweets were considered "false and misleading" and could bring charges by the FTC.
Deutsch LA declined to comment on the matter and said in a statement that it "appreciates the FTC's staff's cooperation in bringing this matter to resolution."
Following the lawsuit settlement, in a FAQ session, the FTC recommended that advertisers on Twitter include "#paid" or "#ad" hashtags in their tweets to remove any doubt over their intentions.
