FTC: Ad Agency Used Employees' Personal Twitter Accounts to Promote Client's Product

Dec. 3 — An advertising agency agreed to settle Federal Trade Commission charges that its employees unlawfully tweeted about a client's product on their personal accounts without disclosing any material connections, according to a Nov. 25 statement from the commission.

The FTC matter involved the promotion of the PlayStation Vita (PS Vita), which the commission said was a handheld, portable video game console launched in February 2012. The FTC alleged that Sony Computer Entertainment America LLC and its advertising agency, Deutsch LA Inc., misrepresented the gaming capabilities of the PS Vita in advertising, allegations that both companies agreed to settle.

PS Vita advertising included use of the hashtag “#GAMECHANGER.” The FTC said a Deutsch account executive e-mailed the firm's employees about a month before the PS Vita launched and asked them to “generate buzz” by tweeting about the product using #GAMECHANGER.

According to the FTC, several Deutsch employees tweeted positively about the PS Vita. The commission said tweets included “One thing can be said about PlayStation Vita…it’s a #gamechanger” and “Thumbs UP #GAMECHANGER - check out the new PlayStation Vita.”

FTC Endorsement Guidelines 

The FTC charged Deutsch in its complaint with violating Section 5 of the FTC Act, 15 U.S.C. § 45, which makes unlawful deceptive trade acts and practices, because the tweets falsely appeared to be independent reviews of the PS Vita. The FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising, 16 C.F.R. pt. 255, require that any connection between an endorser and seller of a product be disclosed. The FTC updated its endorsement guidelines in 2009, in part to make clear that the rules applied to social media.

Deutsch agreed in the proposed settlement not to make any representations about a handheld game console product unless it clearly and prominently discloses any material connections.

The public can comment on the proposed settlement until Dec. 29, and the FTC will then determine whether to make the proposed consent order final.

Davis & Gilbert LLP represented Deutsch.