Alphabet's Google and iHeartMedia Inc. will be settling $9.4 million with the Federal Trade Commission, as the company allegedly pays radio personalities for promoting the Pixel 4 without even using the smartphone. Along with FTC, seven US states support the allegations of deceptive advertisements.
(Photo : Drew Angerer/Getty Images) NEW YORK, NY - OCTOBER 15: The new Google Pixel 4 smartphone and cases are displayed during a Google launch event on October 15, 2019 in New York City. The new Pixel 4 and Pixel 4 XL phone starts at $799 and will begin shipping on Oct. 24.
Google Settles Charges for Deceptive Ads
After the United States Federal Trade Commission claimed that the company has been paying personalities for promoting Pixel 4 without using the smartphone, Alphabet Inc's Google and iHeartMedia Inc. reached a settlement and agreed to pay worth $9.4 Million in penalties.
Reuters reported that both companies aired 29,000 deceptive advertisements with radio personalities promoting Pixel 4 in 2019 and 2020.
FTC Official Samuel Levine stated that "It is common sense that people put more stock in first-hand experiences. Consumers expect radio advertisements to be truthful and transparent about products, not misleading with fake endorsements. Today's settlement holds Google and iHeart accountable for this deceptive ad campaign and ensures compliance with state and federal law moving forward."
Aside from the settlement, the order also signs both companies to a consent agreement that prohibited Google from getting people in advertisements that claims to use a product even if they didn't.
Thirty days will be allotted for a public comment period for the commissioners to decide and finalize the order. Seven states join FTC, including Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas. Spanish and English were the language that have been used, which violated consumer protection laws.
FTC Sues Google iHeart Media
The tech giant approached iHeartMedia to promote Pixel 4 on-air through radio personalities despite not using the smartphone.
Instead of handing the promoters the device for review purposes, XDA-Developers reported they were handed scripts and states, "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."
The statement also added that one employee from iHeartRadio complained to Google for not providing a smartphone for their personalities, and they were given an info page instead.
While the settlement was an easy decision for Google, iHeartMedia declared bankruptcy in 2018 and repairing the business and the company's reputation since then.
Also Read: Google Settles Location History Probe, to Pay Nearly $400 Million
Google confirms to Gizmodo that the company was pleased for this issue to be resolved, as stated by Spokesperson José Castañeda. He added, "Google takes compliance with advertising laws seriously and has processes in place designed to help ensure we follow relevant regulations and industry standards." Aside from this, Google also settled a $392 agreement with 40 state attorneys generals for location history data collection without informing their users.
Related Article: Google Pixel 4 Radio Ad Paid Hosts $4.6 Million to Promote Phone They Never Used
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Written by Inno Flores
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