Business Beware: You Can’t Take Deceptive Steps to Manipulate the Collection or Publishing of Negative Reviews on Your Website

Businesses are to avoid potentially deceptive conduct that would confuse consumers under Section 5 of the Federal Trade Commission Act, and the FTC is now focusing very heavily on deceptive customer reviews and endorsements. Deceptive conduct includes any conduct which treats positive and negative reviews unequally, thus misleading consumers of useful information and inflating the product’s star rating.

In one of its first cases, the FTC pursued Fashion Nova, LLC, a fast fashion retailer that attempted to conceal negative reviews. According to the complaint, “Fashion Nova used a third- party online product review management interface to post four- and five-star reviews and hold off on lower star reviews [estimated in the hundreds of thousands] for the company’s approval.” Fashion Nova never approved or posted the lower star reviews. In its settlement with the FTC, Fashion Nova is prohibited from suppressing customer reviews of its products and is required to pay $4.2 million to settle the FTC’s allegations.

What does this mean for businesses that use or consult regarding consumer reviews?

• Don’t manipulate reviews by hiding/revising/displaying differently bad reviews, encourage people not to leave bad reviews, or pay people to give only good reviews.
• If you pay people for good reviews, whether in your company or not, the relationship should be clearly and conspicuously disclosed.
• Moderate what your customers are telling you in the reviews and have reasonable processes in place to spot fake or suspicious reviews after publication.

Remember, even if you hire a platform to manage your customer reviews, your business is still liable, just like Fashion Nova.

Posted by Attorney Ruth Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, cybersecurity, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice. 

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