• by Wendy Davis  @wendyndavis, July 24, 2024

The app Cameo, which allows companies to pay celebrities for video endorsements, failed to ensure the videos disclosed that they were actually paid ads, a coalition of attorneys general alleged Wednesday.

Cameo agreed to pay $100,000 to settle the charges.

The settlement agreement calls for a larger fine of $600,000 fine, but with $500,000 suspended due to Cameo's “inability to pay” the full amount. The agreement states that Cameo -- valued at $1 billion in 2021 -- can't pay the full fine based on audited financial statements from 2021 and 2022, and "additional representations" made in 2023.

Cameo also promised to implement initiatives aimed at informing consumers when videos are actually paid ads.

Among other programs, the company said it will use a watermark to indicate when a video is a paid endorsement.

The app also agreed to inform all brands that they are required to clearly and conspicuously disclose any material connections between themselves and endorsers.

“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,” New York Attorney General Letitia James, who led the coalition of state attorneys general, stated Wednesday. “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.”