Accused of Paying Off YouTubers, Microsoft Says It Did Nothing Wrong

Microsoft may have just gotten the Xbox One back on track sales wise, however it looks like the company simple can’t avoid public relations snafus. Months after it was forced to reign-in plans for the console when it failed to properly educate users about disc-based games for the system, it’s now battling accusations that it partnered with Machinima, a YouTube video production company, to pay off video makers and keep quiet about it.

News about the scheme surfaced when ArsTechnica reported that Microsoft was using Machinima’s YouTube channel affiliates to promote its next-generation entertainment console. Reportedly, that original program allowed video makers to earn $3 for every 1,000 viewers who watched at least 30 seconds of Xbox One related content. That alone, wouldn’t have made much noise, however copies of the campaign’s legal agreement that surfaced over the weekend included a line that could have been interpreted as Microsoft requiring participants in the program to keep quiet about the deal.

“You agree to keep confidential at all times all matters relating to this Agreement including, without limitation, the Promotional Requirements, and the CPM listed above,” the agreement said. As it turns out, if Microsoft had required participants to keep quiet it was in violation of the United States Federal Trade Commission’s guidelines. Reportedly, Microsoft had offered YouTube makers a deal of this sort since the Xbox One launched. That being said, the original deal only included $1 per 1,000 people who looked at 30 minutes of footage.

A new statement sent to The Verge acknowledges the program but insists that Microsoft nor Machinima had plans to deceive viewers, saying:

“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.”

While definitive, that statement doesn’t exactly explain why documents for similar promotions during Holiday 2012 for other campaigns of this nature don’t include a clause similar to the one included in the YouTube December promotion.

Microsoft isn’t expected to take a huge hit in sales thanks to the promotion being uncovered. Nevertheless, this incident does add to Microsoft’s Xbox-related PR woes. Over the summer Microsoft had to change large portions of the Xbox One’s feature set after it failed to explain them properly and ended up with user’s proclaiming that the company wanted to kill off the entire used games market.

The Xbox One is currently on store shelves for $499.