The Federal Trade Commission and attorney generals for the states of Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas have entered into agreements with Google and iHeartMedia to settle a lawsuit for airing nearly 29,000 deceptive endorsements by radio personalities promoting their use of and experience with Google’s Pixel 4 phone in 2019 and 2020.
Google had paid iHeartMedia over $2.6 million to record endorsement reads from personalities across the country promoting the Pixel 4 smartphone as well as $2 million to eleven other broadcast groups. Google provided scripts for the personalities to use which iHeart told Google’s media buying agent requesting the devices for the talents and stating they cannot use first person tenses in the script when they have not used the product. The suit states that talents at 43 iHeart stations in ten markets (Atlanta, Boston, Chicago, Dallas/Ft. Worth, Denver/Boulder, Houston, Los Angeles, New York, Phoenix, and San Francisco) recorded the scripts saying what they did with the Pixel 4 when they had not utilized the device. Those ads aired over 11,200 times between October and December 2019. Later campaigns would run into early 2020 on iHeartMedia stations as well as 58 stations owned by other companies in those markets. The personalties reads stated what they did with the Pixel 4 including taking photos at night when they had not used the phones.
As part of the settlement with the FTC, iHeartMedia is prohibited from misrepresenting that an endorser has owned or used, or about their experience with, any consumer product or service and Google is prohibited from misrepresenting that an endorser has owned or used, or about their experience with certain products. Both companies must distribute the order to certain people, file compliance reports with the Commission, and keep records to allow the FTC to ensure compliance.
A total of $9.4 million in penalties was collected by the attorney generals of Arizona, California, Georgia, Illinois, Massachusetts, and New York with both companies. Texas also settled with iHeartMedia.
The original FTC complaint can be read here.
The Federal Trade Commission and state attorneys general announced lawsuits against Google LLC and iHeartMedia, Inc. for airing nearly 29,000 deceptive endorsements by radio personalities promoting their use of and experience with Google’s Pixel 4 phone in 2019 and 2020. The proposed FTC orders and the state judgments settling the allegations bar Google and iHeartMedia from similar misrepresentations, and the state judgments also require them to pay $9.4 million in penalties.
“Google and iHeartMedia paid influencers to promote products they never used, showing a blatant disrespect for truth-in-advertising rules,” said Bureau of Consumer Protection Director Samuel Levine. “The FTC will not stop working with our partners in the states to crack down on deceptive ads and ensure firms that break the rules pay a price.”
“It is common sense that people put more stock in first-hand experiences. Consumers expect radio advertisements to be truthful and transparent about products, not misleading with fake endorsements,” said Massachusetts Attorney General Maura Healey. “Today’s settlement holds Google and iHeart accountable for this deceptive ad campaign and ensures compliance with state and federal law moving forward.”
Google is a multinational technology company that specializes in internet-related services and products. iHeartMedia, headquartered in San Antonio, Texas, is the nation’s largest radio station owner, with more than 850 AM and FM radio stations and an internet radio network that collectively reach more than 245 million listeners each month.
According to the FTC, in 2019, Google hired iHeartMedia and 11 other radio networks in ten major markets to have on-air personalities record and broadcast endorsements of the Pixel 4 phone. Google provided iHeartMedia with scripts that included lines about the Pixel 4 phone like, “It’s my favorite phone camera out there, especially in low light, thanks to Night Sight Mode,” “I’ve been taking studio-like photos of everything,” and “It’s also great at helping me get stuff done, thanks to the new voice activated Google Assistant that can handle multiple tasks at once.” However, the on-air personalities were not provided with Pixel 4s before recording and airing the majority of the ads and therefore did not own or regularly use the phones.
The agency’s administrative complaint alleges that the companies’ misrepresentations violated the FTC Act.
Enforcement Action
The proposed orders settling the FTC’s charges are designed to address the Google and iHeartMedia’s allegedly illegal conduct. Among other things, they:
- Prohibit Google from misrepresenting that an endorser has owned or used, or about their experience with, certain products;
- Prohibit iHeartMedia from misrepresenting that an endorser has owned or used, or about their experience with, any consumer product or service;
- Require Google and iHeartMedia to distribute the order to certain people, file compliance reports with the Commission, and keep records to allow the FTC to ensure compliance.
This action builds on the FTC’s work to tackle phony testimonials, fake reviews, and other deceptive endorsements, including challenging online fashion retailer Fashion Nova for its past practice of suppressing of negative reviews, putting more than 700 marketers on notice about fake reviews and other misleading endorsements, seeking public comment on proposed updates to the Endorsement Guides, and issuing business guidance about online review management for marketers and platforms.
The Commission vote to issue the administrative complaint and to accept the proposed consent agreements was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, after which the Commission will decide whether to make the proposed consent orders final. Instructions for filing comments will appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.
The Commission appreciates the support of the attorney generals offices in the following states for their help in securing monetary relief in this matter: Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $46,517.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
This story first appeared on radioinsight.com