Microsoft tried to pay various YouTube account holders to post positive reviews related to the Xbox One, Ars Technica reports.
Microsoft, however, tells Business Insider that it’s not conducting payola scheme on YouTube.
Video partners of Machinima were allegedly offered a premium of $US3 for every thousand views on video segments, which included 30 seconds of material praising the entertainment console.
Machinima UK’s community manager tweeted this promotion before deleting it, according to Gizmodo UK.
A text copy of a document purporting to be Microsoft’s legal agreement for the campaign states that video creators can’t say anything negative about Machinima, Xbox or any of its games. The agreement also requires its partners to keep secret the fact that they are being paid to generate content for Xbox:
You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above.
But Microsoft told Business Insider that it is not telling YouTubers what they could say; that the confidentiality agreement applied only to describing the legal agreement itself; and that it was not a ban on disclosing the payments that generated the content. The company supplied this statement:
This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content. Any confidentiality provisions, terms or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion.
That interpretation is difficult to square with the contract language, however, which requires silence on “all matters relating to this Agreement” including “the Promotional Requirements.” And although Microsoft says it didn’t “review” the content, the contract language says, “You may not say anything negative.”
It’s not illegal to pay people for positive reviews. But it is a contravention of FTC legal guidelines if those reviewers don’t disclose that they are being paid.
The agreement also states. “You understand that You may not post a copy of this Agreement or any terms thereof online.” Unsurprisingly, it appeared online a mere five days after the campaign began.
Here’s a copy of the alleged contract, which we saw on Pastebin:
XBOX ONE RELEASE VIDEO CAMPAIGN AGREEMENT
As of today’s date, You (hereinafter “You” or “your”), have agreed to work with Machinima, Inc. (“Machinima”) to promote the Xbox One Gaming Console (“Xbox One Release”) on your main channel on YouTube.com (“Your YouTube Channel”) in accordance with the terms and conditions set forth in this agreement (the “Agreement”).
1. PROMOTIONAL CAMPAIGN PERIOD AND ELIGIBILITY.
Machinima’s promotional campaign of Xbox One Release (the “Campaign”) shall commence on January 13, 2014 at 12:00am PT and end on February 9, 2014 at 11:59pm PT (the “Campaign Period”). The Campaign is open only to Machinima Channel Affiliates, who are thirteen (13) years of age or older (Machinima Channel Affiliates who are thirteen (13) to seventeen (17) years of age at the time of signature of this Agreement must receive written permission from his or her parent or legal guardian in accordance with the terms herein prior to participating in this Campaign). A “Machinima Channel Affiliate” is a person or entity that has signed and valid Machinima Channel Affiliate/Partner Agreement (“Affiliate Agreement”), incorporated herein by reference, which includes Your YouTube Channel within the Machinima network and such Machinima Channel Affiliate is neither in breach nor default under such Affiliate Agreement.
2. PROMOTIONAL REQUIREMENTS.
Machinima shall consider You active in this Campaign upon Machinima’s receipt and approval of this Agreement by You by clicking the box as indicated and if You are 13 — 17 years of age, upon receipt and acceptance of You and Your parent’s or legal guardian’s signature must also be included below.
Your role within the Campaign is focused on driving awareness for Xbox One Release, which includes the release of the video games available for the Xbox One Console (the “Games”).
(I) Your specific duties shall be to promote the Xbox One Release, as described below.
(II) You shall perform the following “Promotional Requirements” during the Campaign Term:
a) Campaign Videos: Create at least one (1) or as many video(s) as You desire, with minimum running time of 60 (:60) seconds, in which You provide commentary about Xbox One Release and Games (each a “Campaign Video”). The Campaign Videos shall be uploaded and viewable on Your YouTube Channel, and nowhere else, during the Campaign Period. The Campaign Video shall include:
– You Campaign Video is “Tagged” with the following tag “XB1M13” (“Campaign Tag”). The Campaign Tag must not be modified in any way and Campaign Videos that do not incorporate the “XB1M13” tag in their tag section will not be eligible for the Compensation (as defined below) under this Agreement.
b) Campaign Video Guidelines: As part of the Campaign Videos, You must comply with the following guidelines for this Campaign:
1. Do not post any Campaign Videos until January 13 at 12:00am PT;
2. You may not say anything negative or disparaging about Machinima, Xbox One or any of its Games in your Campaign Video;
3. You must feature at least 30 seconds (:30) of gameplay/footage of any Xbox One game within the first 2 minutes of Campaign Video
4. You must verbally mention that you are playing the game shown on the Xbox One console.
5. Campaign Video(s) must annotate to the Xbox One YouTube channel www.youtube.com/xbox, or another Campaign Video on Your YouTube Channel that is part of this Campaign;
6. Do not use third-party music or third party content in your Campaign Video, that You don’t own the rights to such music or content or have not be properly licensed by You
7. Do not use excessive inappropriate language or profanity in your Campaign Video;
8. Each Campaign Video must have a minimum running time of at least 60 (:60) seconds in length; and
9. Your Campaign Videos must comply with the YouTube Community Guidelines located at http://www.youtube.com/t/community_guidelines; and
10. If You are 13 — 17 years of age, You must upload a copy of this Agreement signed by You and Your parent or legal guardian along with each Campaign Video in order to participate in the Campaign.
As compensation for the promotion that You are providing, You shall be paid the consideration of One U.S. Dollar ($3.00) CPM (“CPM Compensation”) for every valid View (as the terms View” is defined in your existing Affiliate Agreement with Machinima, including all the terms thereof, are incorporated herein by reference) of each Campaign Video that complies with the Promotional Requirements set forth above, subject to the “Campaign Cap” (as defined below). “CPM” means cost per thousand views of Campaign Video on Your YouTube Channel, other than views generated by Action Fraud (as defined below). You will be paid within 45 days after the close of the Campaign Period upon Machinima receipt of a signed W-9 or W-8BEN form, if requested. You agree to be paid as an independent contractor and You agree to be solely responsible for payment of any income, sales or use tax(es) or other payment(s), which may become due to any state or federal authority. You acknowledge and agree that Machinima has the right to offset any amounts owed to You under this Agreement against any amounts owed by You to Machinima under any other agreement, including but not limited to Your Affiliate Agreement.
The budgetary Views “cap” for the entire Campaign is 1,250,000 Views among all U.S. and international participants in the Campaign (the “Campaign Cap”). Machinima will notify You via e-mail if and when the Campaign Cap is reach, and at that point the Campaign will be terminated as of the date of such notification (“Early Termination Date”), and You will not receive the CPM Compensation for Views received for your Campaign Video(s) beyond such Early Termination Date; however You will continue to receive your standard payment under your Affiliate Agreement. However, if the Campaign Cap is not reached during the Campaign Period, then the Campaign will automatically end on the final date of the Campaign Period (i.e., February 9, 2014 at 11:59pm PT).
You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above. You understand that You may not post a copy of this Agreement or any terms thereof online or share them with any third party (other than a legal or financial representative). You agree that You have read the Nondisclosure Agreement (attached hereto and marked as Exhibit “A”) and You understand and agree to all of terms of the Nondisclosure Agreement, which is incorporated as part of this Agreement.
If You fail to perform any of the Campaign elements outlined earlier in a timely and professional manner or breach any obligation or requirement of this Agreement, Machinima may terminate this Agreement, at any time and in Machinima’s sole discretion, and allocate any remaining budget to other partners.
If Machinima suspects or determines that You are driving Views as the result of Action Fraud, and/or fail to make Campaign Videos in compliance with this Agreement, Machinima can immediately terminate this Agreement, in its sole discretion and You will be barred from participation in future campaigns. “Action Fraud” means so-called “click fraud” or “impression fraud,” or fraud of any other kind, whether in any automated or human way, including, without limitation, by the use of a person, an automated script or a computer program (for example, online robots or “bots”) to click or otherwise activate any form of View, response mechanism, annotation or advertising unit, or any other fraudulent means, to increase Views, impressions, skew results or imitate a legitimate user of a web or mobile browser or other software application for viewing on any device, for example, by clicking on an ad unit for the purpose of generating an improper click value and generating revenue.
You acknowledge that Machinima shall have to sole right and authority to review each Campaign Video that You make for this Campaign for quality control and compliance with the terms hereof and Machinima has the authority, in its sole discretion, to take down such Campaign Video(s) from Your YouTube Channel or require You to edit any Campaign Video which has content that is not in compliance with this Agreement.
This Agreement is personal to You, is non-assignable by You, and may be modified or waived only in writing signed by all Parties. If any provision of this Agreement is found to be unenforceable, such provision will be limited or deleted to the minimum extent necessary so that the remaining terms remain in full force and effect.
THE AGREEMENT IS GOVERNED BY, AND WILL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, AND THE UNITED STATES OF AMERICA AND THE FORUM AND VENUE FOR ANY DISPUTE SHALL BE IN LOS ANGELES, CALIFORNIA. IF THE CONTROVERSY OR CLAIM IS NOT OTHERWISE RESOLVED THROUGH DIRECT DISCUSSIONS OR MEDIATION, IT SHALL THEN BE RESOLVED BY FINAL AND BINDING ARBITRATION ADMINISTERED BY JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC., IN ACCORDANCE WITH ITS STREAMLINED ARBITRATION RULES AND PROCEDURES OR SUBSEQUENT VERSIONS THEREOF (“JAMS RULES”). THE JAMS RULES FOR SELECTION OF AN ARBITRATOR SHALL BE FOLLOWED, EXCEPT THAT THE ARBITRATOR SHALL BE EXPERIENCED AND LICENSED TO PRACTICE LAW IN CALIFORNIA. ALL PROCEEDINGS BROUGHT PURSUANT TO THIS PARAGRAPH WILL BE CONDUCTED IN THE COUNTY OF LOS ANGELES. THE REMEDY FOR ANY CLAIM SHALL BE LIMITED TO ACTUAL DAMAGES, AND IN NO EVENT SHALL ANY PARTY BE ENTITLED TO RECOVER PUNITIVE, EXEMPLARY, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, INCLUDING ATTORNEY’S FEES OR OTHER SUCH RELATED COSTS OF BRINGING A CLAIM, OR TO RESCIND THIS AGREEMENT OR SEEK INJUNCTIVE OR ANY OTHER EQUITABLE RELIEF.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures by facsimile, electronic signature (e.g., DocuSign) and/or scanned/emailed original shall be deemed original signatures.
(signature page follows)
By clicking the “I agree” button below signing below, You agree and acknowledge that: (i) You are eighteen (18) years of age or older (or if 13-17 years of age, agree to comply with the requirements set forth herein with regard to parental consent); and (ii) You have read and agree to all the terms above and in the Nondisclosure Agreement, attached hereto and incorporated herein by reference.
CLICK “I AGREE” TO ACCEPT THIS AGREEMENT.
IF YOU ARE UNDER THE AGE OF EIGHTEEN (18) OR IS OTHERWISE DEEMED A MINOR OR INCAPABLE OF ENTERING INTO A BINDING CONTRACT UNDER APPLICABLE LAWS, SIGNATURE BY A PARENT OR AUTHORISED GUARDIAN WITH THE LEGAL AUTHORITY TO BIND YOU IS REQUIRED, BELOW, IN ADDITION TO YOUR SIGNATURE:
I represent and warrant that I am a legal guardian of
(print minor’s name here) ___________________________ and acknowledge that I have read the foregoing Agreement and attached Nondisclosure Agreement and am familiar with each and all of the terms, covenants and conditions contained therein; I am satisfied that said Agreement and attached Nondisclosure Agreement are fair and equitable, and I hereby give my express consent to the execution thereof and will not revoke my consent thereto at any time hereafter.
Print Name of Parent/Guardian: _________________________ Signature: __________________________
EXHIBIT “A” NONDISCLOSURE AGREEMENT
In connection with a proposed business relationship, Machinima, Inc. (hereinafter “Company”) have allowed You (the individual or entity named in the Agreement attached hereto) access, or may allow You access, to business, technical or other information, materials and/or ideas regarding Company’s business practices (“Proprietary Information,” which term shall include, without limitation, anything You learn or discover as a result of exposure to or analysis of any Proprietary Information).
In consideration of any disclosure and any negotiations concerning the proposed business relationship, You agree as follows:
You will hold in confidence and will not possess or use (except as required to evaluate the proposed business relationship) or disclose any Proprietary Information except information You can document (a) is in the public domain through no fault of yours, (b) was properly known to You, without restriction, prior to disclosure by Company or (c) was properly disclosed to You by another person without restriction. You will not reverse engineer or attempt to derive the composition or underlying information, structure or ideas of any Proprietary Information. The foregoing does not grant You a licence in or to any of the Proprietary Information.
If You decide not to proceed with the proposed business relationship or if asked by Company, You will promptly return all Proprietary Information and all copies, extracts and other objects or items in which Proprietary Information may be contained or embodied.
You will promptly notify Company of any unauthorised release, disclosure or use of Proprietary Information.
You understand that this Agreement does not obligate Company to disclose any information or negotiate or enter into any agreement or relationship. You will strictly abide by any and all instructions and restrictions provided by Company from time to time with respect to Proprietary Information or Company systems. You will ensure the security of any facilities, machines, accounts, passwords and methods You use to store any Proprietary Information or to access Company systems and ensure that no other person has or obtains access thereto.
The terms of this Agreement will remain in effect with respect to any particular Proprietary Information until You can document that such Proprietary Information falls into one of the exceptions stated in Paragraph 1 above.
You acknowledge and agree that due to the unique nature of the Proprietary Information, any breach of this agreement would cause irreparable harm to Company for which damages are not an adequate remedy, and that Company shall therefore be entitled to equitable relief in addition to all other remedies available at law.
This Agreement is personal to You, is nonassignable by You, is governed by the internal laws of the State of California and may be modified or waived only in writing signed by both parties. If any provision of this Agreement is found to be unenforceable, such provision will be limited or deleted to the minimum extent necessary so that the remaining terms remain in full force and effect. The prevailing party in any dispute or legal action regarding the subject matter of this Agreement shall be entitled to recover reasonable attorneys’ fees and costs.
By signing the Agreement attached hereto, You are agreeing to all of the terms of this Nondisclosure Agreement, above.