Alphabet’s (NASDAQ:GOOGL) (GOOG) Google and iHeartMedia (NASDAQ:IHRT) have agreed to pay $9.4 million in penalties as part of their settlement with the U.S. Federal Trade Commission (FTC) and seven U.S. states over allegations regarding deceptive ads for promoting Google’s Pixel 4 smartphone. The seven states that were part of this litigation were Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas.
According to the FTC’s statement, Google and mass media company iHeartMedia paid radio influencers to promote their experience with Google’s Pixel 4 phone via misleading endorsements aired nearly 29,000 times in 2019 and 2020. Samuel Levine, FTC’s Bureau of Consumer Protection Director, stated that the fact that influencers were paid to promote products they never used showed “a blatant disrespect for truth-in-advertising rules.”
Google stated that it was pleased to settle the case. According to Reuters, Google spokesperson stated, “We take compliance with advertising laws seriously and have processes in place designed to help ensure we follow relevant regulations and industry standards.”
Google is facing several allegations related to its search and advertising practices. It is often criticized for misusing its dominant position to suppress competition. Earlier this month, Google was asked to pay nearly $392 million to settle allegations by 40 states that the tech giant illegally tracked users’ locations.
Is GOOGL a Buy Right Now?
Alphabet stock earns Wall Street’s Strong Buy consensus rating based on 28 unanimous Buys. The average GOOGL stock price target of $128.71 suggests 34% upside potential. Shares have fallen nearly 34% amid a broader tech sell-off.