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The Federal Trade Commission (FTC) applies a couple of cardinal rules for advertisers playing in the social media space: tell the truth and disclose endorsement arrangements.  Sony Computer Entertainment America LLC and its advertising agency Deutsch LA, Inc. apparently broke those rules in advertisements launching Sony’s PlayStation Vita (PS Vita) in 2012.  Each agreed to settle FTC charges that they violated the FTC Act.  The agreements bar both Sony and Deutsch from making misleading claims, require Sony to provide consumers with either a $25 cash/credit refund, or a $50 merchandise or services voucher and notify consumers about their eligibility via e-mail, and bar Deutsch from misrepresenting that an endorser is an independent user.

The PS Vita is a handheld device that was marketed as a mobile gaming platform that, among other things, enabled consumers to transfer game play from Sony’s PlayStation 3 platform to the PS Vita via “remote play” or “cross-save” features.  Around the time of the product’s launch, Deutsch encouraged its employees to post about the game on Twitter with the hashtag “#gamechanger,” but with one big omission: Deutsch failed to advise its employees to disclose their connection to Deutsch or Sony.  Encouraged by the company-wide e-mail, Deutsch employees posted tweets such as:

“One thing can be said about PlayStation Vita…it’s a #gamechanger”

“PS Vita [ruling] the world. Learn about it!”

“Thumbs UP #GAMECHANGER – check out the new PlayStation Vita”

“This is sick. . . .See the new PS Vita in action. The gaming #GameChanger”

“Got the chance to get my hands on a PS Vita and I’m amazed how great the graphics are. It’s definitely a #gamechanger!”

According to the FTC, absent a disclosure that the employees worked for Sony’s advertising agency, these tweets meant Deutsch “has represented, directly or indirectly, expressly or by implication, that these comments about the PS Vita were independent comments reflecting the views of ordinary consumers who had used the PS Vita,” in violation of the FTC’s Endorsement Guides.

Further, the FTC said the advertised features were extremely limited, contrary to Sony’s claims.  For example, ads indicated that PS Vita users could pause PlayStation 3 games any time and continue playing them on the PS Vita.  In reality, saving capabilities varied widely from game to game; in one baseball game, saved games could only be transferred to the PS Vita after finishing nine innings.

Playing games with the FTC’s Endorsement Guides and making unsubstantiated claims seldom ends well for advertisers and their agencies.  When it comes to social media, advertisers should consult the FTC’s March 2013 .com Disclosures guidance, the October 2009 revision to the Endorsement Guidelines, and last December’s workshop on native advertising, Blurred Lines.