The government revs up its crackdown on fake social media influence as U.S. regulators just ending their first case by settling with a company that sold YouTube views and Twitter followers to celebrities and brands. And in another case, regulators settled with a cosmetics brand it found was making fake reviews to boost its products online.
“The Federal Trade Commission announced the twin settlements, both striking at the heart of inauthentic marketing tactics online, which is an issue major brands have complained about for years,” Ad Age reported.
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In the first case, marketing company Devumi was accused of selling fake online followers so it could boost the visibility of videos on YouTube and increase follower counts on sites like LinkedIn and Twitter, said the FTC.
“Devumi had already settled with New York’s attorney general, following a New York Times exposé last year. The Times report found that Devumi generated fake followers for stars like John Leguizamo and noted luminaries like Louise Linton, who is the wife of Treasury Secretary Steven Mnuchin,” Ad Age reported.
In the FTC case, the company agreed to pay $2.5 million but ultimately was ordered to pay only $250,000 of the settlement—provided it sticks to the terms of the deal. According to the FTC, the deal as the “first-ever complaint challenging the sale of fake indicators of social media influence, which are important metrics that businesses and individuals use in making hiring, investing, purchasing, licensing and viewing decisions.”
The second case involved fake online reviews. The company accused: Sunday Riley Modern Skincare, the cosmetics firm.
“Sunday Riley employees were accused of swarming the company’s product pages on Sephora’s website to leave positive reviews. Sephora identified the coordinated effort and took down the reviews, but Sunday Riley employees returned using new internet addresses to cover their tracks and leave new reviews, according to the FTC,” Ad Age reported.
Sunday Riley made a settlement deal with the FTC.