In what is being called the first enforcement action involving fake social media endorsements, New York Attorney General Letitia James announced a settlement with a company that allegedly sold the likes and views of fake followers on Twitter, YouTube, LinkedIn, SoundCloud and Pinterest.
Devumi made $15 million between 2015 and 2017, according to the AG, by using bot and sock-puppet accounts to provide online endorsements in the form of likes and views. The fake accounts purported to “express the genuine positive opinions of real people,” the AG said, in some instances by copying real individuals’ social media profiles, including names and pictures, without their consent.
The company also sold social media influencer endorsements but failed to disclose that the influencers were paid for their recommendations, the AG alleged.
“This is especially troubling when considering that the opinions of influencers can have particularly strong influence over the reputation and sales for any product, company, service or person they endorse,” according to the statement released announcing the enforcement action.
Clients included actors, athletes, businesspeople and politicians who “purchased social media engagement to inflate their apparent popularity in hopes of breaking into desired fields.” Fake “likes” and “shares” cost up to $228 per year, with available packages of up to 500,000 Twitter followers for $3,997 and up to 5 million views on YouTube for $21,999.
Devumi’s business practices deceived not only social media audiences by attempting to influence their buying decisions and advertisers about whom to sponsor, but its own customers as well, some of whom believed they were paying for authentic endorsements, the AG said.
To settle the charges, the company—which ceased operations last year after news reports broke about its business and the Attorney General’s Office announced an investigation—is prohibited from engaging in any of the same misconduct going forward. Although the company and its owner did not admit to any wrongdoing, they agreed to pay $50,000 to the Attorney General’s Office to settle the charges.
Why it matters: “As people and companies like Devumi continue to make a quick buck by lying to honest Americans, my office will continue to find and stop anyone who sells online deception,” AG James said in a statement. “With this settlement, we are sending a clear message that anyone profiting off of deception and impersonation is breaking the law and will be held accountable.” The AG said the “precedent-setting settlement” marks the first finding by a law enforcement agency that selling fake social media engagement and using stolen identities to engage in online activity is illegal.