Business Blog
Hey, Google and iHeartMedia: FTC doesn’t heart deceptive endorsements
If there’s one point to take from the FTC’s action against Google and iHeartMedia, it’s that the FTC doesn’t heart endorsements given by people who haven’t actually used the product they recommend. In proposed settlements announced in conjunction with actions brought by State Attorneys General, the FTC alleges that Google and iHeartMedia aired nearly 29,000 ads featuring iHeart radio personalities touting their positive personal experiences with Google’s Pixel 4 phone when the purported endorsers hadn’t used the product. The combined financial penalties in the state actions: $9.4 million.
The largest owner of radio stations in the United States, iHeartMedia has more than 850 AM and FM stations and also streams content online with a total of 245 million listeners each month. iHeartMedia gives selected on-air personalities the option to make more money by recording ads for specific clients that will run on iHeart stations.
Enter Google. Through its media buying agent, Google paid iHeartMedia more than $2.6 million to have its on-air personalities record ads for the company’s Pixel 4 to run on iHeartMedia stations. According to the complaint, Google spent almost $2 million on similar arrangements with smaller radio networks unaffiliated with iHeartMedia.
The FTC says Google provided iHeartMedia and the other networks with scripts for the radio personalities to use in recording ads in English and in Spanish. The typical script lauded many features of the Pixel 4, singling out the camera’s “studio-like photos” and the performance of its Night Sight Mode at night and in low light. The scripts included multiple first-person references to how the endorser had supposedly used the phone – for example, for taking photos at “my son’s football game,” “my mom and dad’s 50th birthdays,” or “my daughter’s school play.”
Early in the campaign, iHeartMedia got Google’s approval to have its on-air personalities “customize certain parts of the script pending what’s relevant to their personal lives (i.e., if they have kids, involved in certain activities/hobbies, etc.).” In October 2019, 43 iHeart personalities at stations in 10 different markets each recorded ads for the Pixel 4 using language identical or substantially similar to what was in Google’s scripts. Some of them personalized how they claimed to use the Pixel 4. Those ads aired over 11,200 times between October and December 2019.
But regardless of what the radio personalities stated in the ads, the FTC says they all had one thing in common: None of them had ever actually owned or regularly used Google’s Pixel 4.
In response to an iHeartMedia request for the phones, a Google employee said the company would “not be able to provide devices at this time,” and instead provided a link to a webpage about the phone’s features, noting that “our team has also provided [a] write-up on how to talk about the device.” Despite the fact that both Google and iHeartMedia were aware that the on-air personalities hadn’t actually used the Pixel 4, iHeartMedia continued to get its personnel to record similar ads – ads that aired thousands of times. Google ultimately provided iHeartMedia with only five Pixel 4s. In addition, the FTC says Google made deals with other networks to get their on-air personalities to give similar endorsements, also without having actually used the Pixel 4.
The FTC complaint alleges that Google and iHeartMedia violated the FTC Act by falsely representing that iHeart personalities owned or regularly used Pixel 4s and that they had used the phones to take pictures at night. The complaint also charges Google with making similar claims about radio personalities not affiliated with iHeart.
State settlements impose a total of $9.4 million in financial penalties. Arizona, California, Georgia, Illinois, Massachusetts, and New York announced settlements with Google and iHeartMedia. Texas has also settled with iHeartMedia.
In addition, the proposed FTC order against Google prohibits it from making misrepresentations that an endorser has owned or used certain products or about their experience with those products. The proposed iHeartMedia order prohibits it from making misrepresentations that an endorser has owned or used any product or service or about their experience with the product or service. Once the proposed orders are published in the Federal Register, the FTC will accept public comment for 30 days.
What can other companies take from the actions in this case? As the FTC Endorsement Guides make clear, “When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given.” There’s no excuse for any advertiser – and especially companies like Google and iHeartMedia – to ignore that truth-in-advertising fundamental and go ahead with a campaign they know to be untruthful. Furthermore, in transactions like the deal between Google and iHeartMedia, legal compliance is a two-way street. Both companies are responsible for ensuring their advertising claims are truthful and both companies may be held liable when they fail that basic obligation to consumers.
I think they got off light. Consumers and taxpayers are the life blood of a nation, its economy, its government and even its military and law enforcement. what if everybody all of the sudden said i'm done spending money . Or to goggone with it I'm not going to pay this bill or that bill or my taxes? Or if everybody quit their job and signed up for public aid and Social Security?
It is a proven historical fact that every time there has been a surplus one factor is because taxes hed been lowered.
Furthermore when companies are getting grants and ppp loans and all kinds of other incentives and selling gooda to countries that are not even allies cheaper than they are their own people tgats not good either.
It sounds like the FTC and states went after iHeart when they should have gone after Google. Google was the one who paid for the ads and directed iHeart and their personalities to say their particular scripts. iHeart doesn't have Google levels of money, but leave it up to the government to screw it up.
I would like to move forward with a lawsuit against Google and IHeart. For years their advertiments have been taking advantage of us consumers, it is time to take back what has been taken from us.
I’m wondering whether there isn’t perhaps individual liability on the part of the announcer who should have been given the opportunity to decline doing the commercial… or whether they were forced to as a condition of employment. Sometimes that kind of pressure can happen in an organization.
There is a similar situation with individual EMPLOYEE liability
at radio stations for using music under a commercial where they have not bothered to obtain the “synchronization” rights for that purpose. In many cases they ordered by management to do so. Or the client pushes it and the station, afraid of losing the account, grants their wish bur then takes the cheap way out by not licensing the music.
There may be archived cases you may wish to refer to of the music company suing all the way down the path to the individual sales, voice, and production people in the stations.
Dear ftc.gov webmaster, You always provide great resources and references.