Technology

FTC warns Instagram influencers to disclose business ties

FTC warns Instagram influencers to disclose business ties

According to the agreement, which was published by the FTC on Tuesday, there will be no fine issued to Martin or Cassell for violating the U.S. Federal Trade Commission Act, which requires full disclosure of any relationship that a video creator might have with a product he or she is promoting. Each violation of such an order may result in a civil penalty of up to $40,654. In Counter-Strike: Global Offensive, players would be rewarded with collectible items known as a "skin", and these skins could then be traded on the Steam Marketplace, or sold for cash.

But amid growing concerns that these websites enabled minors to illegally gamble online, other YouTubers discovered that Martin and Cassell were president and vice president of CS:GO Lotto, respectively.

"Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts", FTC Acting Chairman Maureen Ohlhausen says.

It now comes as a surprise that the FTC has made a decision to not impose any fines, which means that both individuals have managed to get away without any punishment.

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Martin in particular gained notoriety for his Counter-Strike betting videos, in which he promoted sites - including CS:GO Lotto - by hedging his bets and winning big payouts. CSGOLotto is owned by the YouTubers but they did not disclose their connection with the site until after investigations in 2016 by fellow YouTubers HonorTheCall and h3h3Productions. It also puts the company under increased scrutiny by the FTC's enforcement division, which monitors defendants compliance with such orders.

"The goal of the FTC isn't to be a punitive or draconian agency", the regulator told Rolling Stone. The FTC clearly don't have the regulatory muscle to deal with this "new" form of gambling, and U.S. gambling regulation is also failing to adapt quickly enough to this development. In 2015, Cassell came under fire again, after a report from Gamasutra, for a potential violation for promoting the game Dead Realm. The update includes 20 new questions and answers digging into further details about the rules. This is the FTC's "first-ever complaint received against social media influencers", according to the FTC.

At no point does the FTC touch the issue that significant numbers of Martin and Cassell's audience are underage when it comes to gambling law.

"Also today, the FTC announced that staff has both sent warning letters to 21 social media influencers it contacted earlier this year regarding their Instagram posts, and updated staff guidance for social media influencers and endorsers".


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