Studies show that radio listeners tend to trust the brands, products and services their favorite on air personality recommends, but the Federal Trade Commission (FTC) says iHeartMedia and Google teamed up for a flimsy endorsement deal in which radio hosts bragged of the benefits of a smartphone they had never used.
In late November, the FTC and seven state attorneys general sued iHeartMedia and Google for more than 29,000 deceptive endorsements that aired 2019 and 2020 where radio personalities promoted their use of and experience with Google’s Pixel 4 phone even though the hosts didn’t have access to the devices.
A proposed settlement between the parties announced late last month shows that the companies will pay $9.4 million in penalties to seven states to settle the claims. FTC documents don’t reveal which company is responsible for the largest part of the fine. The FTC orders and the state judgments settling the lawsuit bar Google and iHeartMedia from similar misrepresentations going forward.
According to the FTC, this is how the talent endorsement deal worked: Google hired iHeartMedia to have on-air personalities record and broadcast endorsements of the Pixel 4 phone in ten major markets. Google, through its media buying agent, paid iHeartMedia more than $2.6 million, according to the consent decree.
Google provided iHeartMedia with scripts that included lines about the Pixel 4 phone. The scripts included similar claims: “It’s my favorite phone camera out there, especially in low light, thanks to Night Sight Mode,” 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.”
However, the FTC says the on-air personalities were not provided with Pixel 4s before recording and airing the majority of the ads and therefore did not own or regularly use the phones. You can hear examples of the iHeart endorsement reads on the FTC website.
The FTC says on air hosts read the misleading ads on iHeart-owned stations in Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, New York, Phoenix and San Francisco.
The FTC reports Google also spent nearly $2 million on similar arrangements with smaller radio networks — not affiliated with iHeart — in the same markets, which apparently did not lead to fines according to the documents. The FTC did not identify the other radio networks involved.
“Google and iHeartMedia paid influencers to promote products they never used, showing a blatant disrespect for truth-in-advertising rules,” said Samuel Levine, director of the Bureau of Consumer Protection. “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.”
The FTC says its endorsement guide in its advertising rules makes it 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.”
As part of its investigation, the FTC uncovered emails between an iHeart employee and Google’s media buying agent that reveal the radio broadcaster did request Pixel 4s for its air personalities prior to doing the endorsements.
“I know this has been something that we have brought up numerous times, but it’s something that we really need to get to our voicing talent, especially if we want them to use their own first person tense when voicing,” according to the email. “We cannot require talent to use ‘I’ in voiced spots when they have not physically used the product. For this reason, we may receive spots from stations that adjust the tense slightly to remove the personalization of ‘I.’”
The iHeartMedia employee also wrote that “a few markets” had raised concerns about radio personalities using first person without actually having the smartphones, according to the FTC document.
Google’s media buying agent checked with Google and wrote back: “Just heard back from [Google] in regards to sending Pixels to your talent. Unfortunately, this is not feasible for [Google] at this time as the product is not on shelves yet. It would take over a week to ship all of these phones out resulting in a loss of airtime.”
As part of the settlement agreement, iHeart will be required to file compliance reports with the FTC and keep records to allow the commission to ensure compliance. The largest owner of radio stations in the United States declined to comment on the outcome of the FTC action.
The FTC says the consent agreement will be subject to public comment for 30 days, after which the commission will decide whether to make the proposed consent orders final. The settlement remains subject to court approval.