Last week, New York Attorney General Letitia James announced a 30-state settlement with Cameo, the celebrity video app, resolving allegations that the company failed to ensure that celebrities who were hired to promote brands properly disclosed their connection to those brands.  

The multi-state investigation involved Cameo's “Business Cameo” service, which allowed companies to pay celebrities to record videos endorsing their products.  The attorneys general alleged that Cameo “failed to implement measures to ensure those videos were properly disclosed as paid endorsements.”  The AGs alleged that, as a result, “The unlabeled Business Cameos appeared as regular videos of celebrities giving positive reviews of a product or service without disclosing that they were being paid to promote the product or service.”

In announcing the settlement, James said, “For many New Yorkers, cameo videos are fun to watch and share, but consumers deserve to know when they are watching a paid ad or a real review.  Videos that are properly labeled as paid ads help consumers make conscious decisions about what to buy, and Cameo was not doing enough to protect viewers. Today’s settlement will ensure that Cameo steps up to make sure videos are properly labeled and consumers are not misled.”

Under the settlement, Cameo agreed to pay $100,000 in penalties.  The settlement actually called for a payment of $600,000, but that amount was reduced due to Cameo's inability to pay. 

In addition to the payment of penalties, in the settlement, Cameo agreed to take various steps to ensure that Business Cameo videos would include proper disclosures identifying the connection between the celebrity and the brand in the future, including:

• Using a watermark or other disclosure on Business Cameo videos to indicate that they are paid endorsements; 
• Presenting a detailed statement to celebrities and advertisers, before they create a Business Cameo video, that explains the applicable rules; and 
• Establishing procedures for monitoring the videos for compliance.

The other states joining in the settlement were Alabama, Alaska, Arkansas, California, Colorado, Florida Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Virginia, Washington, and Wisconsin.