FTC and States Settle with Google and iHeartMedia Over Misleading Endorsements
In January, we reported that the Texas Attorney General had filed a lawsuit against Google alleging that the company engaged iHeartMedia DJs to provide endorsements for its Pixel 4 phone, even though they had never used it. This week, the FTC and several state attorneys general announced settlements with Google and iHeartMedia over the same conduct. The complaints provide more insights into what may have happened behind the scenes.
According to the FTC and states, Google hired iHeartMedia and other radio networks in 2019 to have DJs read ads for the Pixel 4 phone. Google provided scripts that included endorsements written in the first-person. For example: “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.”
Despite the first-person endorsements, the FTC and states allege that most of the DJs who made these statements had never used a Pixel 4 phone. Apparently, iHeartMedia recognized the problem and asked Google to provide phones for its DJs. Google responded that it couldn’t provide the phones, and instead provided a link to a webpage about the phone’s features. Although Google ultimately provided five phones, more than 40 DJs recorded endorsements using Google’s scripts.
The proposed FTC orders and the state settlements with Google and iHeartMedia bar both companies from misrepresenting that an endorser has owned or used a product and from misrepresenting their experience with certain products. In addition, the settlements impose ongoing recordkeeping, cooperation, compliance monitoring and recordkeeping on the companies. Collectively the settlements also require the companies to pay $9.4 million in penalties. Texas settled with iHeartMedia, but their case against Google seems to be ongoing.
This case holds valuable lessons for companies using influencers or other endorsers. It’s common for companies to provide talking points for their endorsers. There’s nothing inherently wrong with that – in fact, it can help companies and endorsers steer clear of misleading claims. But keep in mind that endorsements must reflect an endorser’s honest opinions, beliefs, or experiences with the products, so you need to avoid scripting those too much.