FTC and State Attorneys General Offices Will Collect $9.4 Million in Penalties From Google and iHeartMedia for Airing Deceptive Endorsements

In early November 2022, the Federal Trade Commission (FTC) and seven state attorneys general offices announced charges against Google LLC and iHeartMedia, Inc. for allegedly airing approximately 29,000 ads featuring made-up testimonials by local radio personalities across the country that were written and disseminated by Google. The FTC’s administrative complaint accompanied state lawsuits filed in Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas.

On November 28, 2022, the FTC announced that Google and iHeartMedia agreed to a settlement with the FTC and the states, and the companies will collectively pay $9.4 million in penalties for distributing fake endorsements promoting Google’s Pixel 4 smartphone.

From 2019 through 2020, Google paid radio personalities more than $2.6 million to record and broadcast first-person endorsements to promote the Pixel 4 phone – even though they had never touched or used it. A number of the Pixel 4 ads, which incorporated first-person language with anecdotes and personal stories, were recorded prior to the release of the Pixel 4.

Examples of scripted lines the FTC alleges violate the FTC Act include:

• It’s my favorite phone camera out there, especially in low light, thanks to Night Silent Mode. . .

• I’ve been taking studio-like photos of everything. . . my son’s football game . . . a meteor shower . . . a rare spotted owl that landed in my backyard. Pics or it didn’t happen, am I right?

In the FTC Press Release announcing the settlement, the Bureau of Consumer Protection Director Samuel Levine is quoted as saying “Google and iHeartMedia paid influencers to promote products they never used, showing a blatant disrespect for truth-in-advertising rules . . . 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.”

In addition to the $9.4 million monetary penalty, Google and iHeartMedia are prohibited from misrepresenting that an endorser owned, used, or experienced certain products or services. The companies must also file compliance reports with the FTC and adhere to recordkeeping requirements to demonstrate compliance with the Order.

The FTC Proposed Consent Agreement has been published in the Federal Register and interested parties may file comments on or before January 3, 2023.

If you would like more information about the FTC Act truth-in-advertising laws, please contact an attorney in our Media practice group.