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

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

By  Mike Masnick

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:

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.

Later in that article, it notes that BuzzFeed is getting $250,000 per month, for 20 Facebook Live videos each month.

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.

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? Since the FTC's update of its guidelines last year, 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:

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.

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?

Read full article and learn more about Endorsements and the FTC here.

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Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

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