Website review

FTC fined $4.2 million for removing negative reviews

Many of us have visited a website where every product has four or five stars and nothing but positive reviews. Although it is possible that the products are really fantastic, it is also possible that the operator of the website is hiding negative reviews. Most advertising attorneys intuitively know that hiding negative reviews is misleading, but they had no court or Federal Trade Commission (FTC) rulings to rely on for that perspective — until now.

The FTC recently alleged in a complaint that an online retailer misrepresented the fact that product reviews on its website reflected the views of all shoppers who submitted reviews, when in fact it was removing reviews with ratings less than four out of five stars. According to the complaint, the retailer used a third-party online product review management interface to automatically post four- and five-star reviews to its website and submit lower-star reviews for company approval. But for four years, the retailer never endorsed or published the hundreds of thousands of less starred and more negative reviews.

Under the proposed settlement, the retailer will pay $4.2 million for consumer damages and will also be prohibited from making false claims on customer reviews or other endorsements. In addition, it must publish on its website all customer reviews of products currently sold – except for reviews containing obscene, sexually explicit, racist or illegal content and reviews unrelated to the customer’s product or services. such as shipping or returns.

The complaint is notable not only for the magnitude of the penalty, but also for the fact that it reflects the FTC’s overall heightened focus on deceptive online review practices. A statement from the director of the FTC’s Consumer Protection Bureau that the retailer “is held accountable for these practices, and other businesses should take notice” underscores this point.

In January 2022, the FTC also released new guidelines for online platforms regarding the moderation and display of customer reviews in a way that does not mislead consumers. Here are some of the main provisions.

Moderation of opinions

When it comes to moderating product reviews, the FTC recognizes that there is no one right way for a company to handle or moderate reviews and what is appropriate will depend on various factors such as model commercial, size and resources of the company. However, regardless of the method of moderation used, FTC staff advise that a few basic principles apply:

1. Have reasonable processes in place to verify that reviews are genuine and not false, misleading, or otherwise manipulated. As technology and threats evolve, be proactive in modifying and upgrading your processes.
2. Don’t edit reviews to edit the message. For example, don’t change the words to make a negative review more positive.
3. Treat positive and negative reviews equally. Do not subject negative reviews to further scrutiny.

Publication of notices

With respect to posting reviews, the FTC recognizes that businesses can make choices about which reviews to display and what to tell consumers about those reviews, and that there is no only right way to display reviews. For example, some online retailers only allow star rating or numeric reviews, while others may allow narrative reviews that are limited or unlimited in length. However, regardless of the method of moderation used, FTC staff advise that a few basic principles apply:

1. Post all genuine reviews and don’t exclude negative reviews.
2. Do not display reviews in a misleading manner. For example, it might be misleading to highlight the positive aspects.
3. If you post reviews when the author of the review has a material connection with the company offering the product or service (for example, when the author of the review has received compensation or a free product in exchange of opinion), this relationship must be clearly and visibly disclosed.
4. Clearly and prominently disclose how you collect, process, and display reviews, and how you determine overall ratings, to the extent necessary to avoid misleading consumers.
5. Have reasonable procedures to identify false or suspicious reviews after they are posted. If a consumer or business tells you that a review may be fake, investigate and take appropriate action. This may include deleting suspicious or bogus reviews, leaving them with appropriate labels, issuing an alert about them, and resolving the issue with those responsible.

Additional precautions and guidelines also apply, particularly regarding offering review incentives. Any company that relies on consumer reviews in its marketing should carefully study FTC guidelines to help reduce the risk of substantial penalties.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 34


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