FTC Approves Final Consent Orders Settling Endorsement and Deceptive Native Advertising Charges against Creaxion Corporation and Inside Publications, LLC
Following a public comment period, the Federal Trade Commission has approved two final orders settling allegations that Creaxion Corporation, Inside Publications, LLC, and their respective principals misrepresented that paid endorsements were independent consumer opinions and that commercial advertising was independent journalistic content.
According to the FTC’s complaint, Creaxion proposed launching and promoting its client’s new mosquito repellent using a media campaign tied to the mosquito-borne Zika virus outbreak and the 2016 Summer Olympics in Brazil. Creaxion partnered with Inside Publications, publisher of Inside Gymnastics magazine, to obtain athlete endorsers and otherwise promote the product.
The FTC alleged the companies hired athletes who posted endorsements on social media for the repellent without disclosing they were paid, and that Inside Publications reposted the endorsements, again without disclosure. Inside Publications allegedly also published in Inside Gymnastics paid ads for the product disguised as features or other articles of interest to its readers.
Under the two Commission orders, the respondents, Creaxion Corporation and Inside Publications, and their principals, are prohibited from making such misrepresentations going forward, and must disclose material connections with, and otherwise monitor, any endorsers they engage.
The Commission vote approving the final consent orders was 5-0. (The staff contact is Karen Mandel, Bureau of Consumer Protection, 202-326-2491.)
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