The Audacity of Hype: Feds, States Fight Fake E-tail Reviews

Shoppers are influenced by online reviews, and authorities want to make sure they're not reacting to false advertising

  • Share
  • Read Later

The New York Attorney General’s office announced Monday that 19 businesses have agreed to pay more than $350,000 in total fines after being accused of forging or selling glowing reviews. Those settling with the NY AG include companies ranging from a laser-hair removal service, who instructed employees to post reviews, to “reputation” consultants that were caught in a sting when AG representatives posed as owners of a yogurt shop seeking to improve their standing online.

The move is the latest in a growing effort by state and federal officials to fight against fake reviewers—a nebulous army out to bolster some businesses and hurt others by inventing customer opinions about products and services. This spring the Washington State Attorney General settled another so-called “astroturfing” case, and the Florida attorney general’s office says they’re aware of and monitoring the problem. The Federal Trade Commission has targeted a series of big name retailers for engaging in ethically dicey interactions with online “influencers.”

Astroturfing is used as a nickname for the practice because writing product reviews is supposed to be a true grassroots activity, an example of ordinary people helping people, and astroturf isn’t grass no matter how real it looks. “Falsified consumer reviews are a growing trend in the online world,” Washington Attorney General Bob Ferguson tells TIME in an email.  “We are always looking for strong astroturfing cases to curb this practice, before social aspects of the Internet become just another tool for unscrupulous businesses to abuse.”

Officials at the FTC, the country’s primary watchdog when it comes to false advertising, welcomed the news of fines being dished out in New York. “We certainly need a lot of cops on the beat,” says Mary Engel, associate director for advertising practices. “We know that consumers often rely on online reviews when making a purchase, so it’s important that those reviews be truthful.” One survey found that 90% of consumers rely on reviews when deciding how to spend their money, while another study suggested that up to 15% of all reviews will be fake by next year.

At US Coachways, a bus charter company fined in New York, the management wrote their own rave reviews. Some businesses hired freelance writers, enlisted friends and offered discounts for online reviews without disclosing that connection. Some paid people in countries like Bangladesh and the Philippines between $1 and $10 a pop for faux endorsements. Reputation managers, also known as “search engine optimization” outfits, fill sites like Yelp and CitySearch with praise for clients or criticism of competitors.

Earlier this year, automotive research company Edmunds.com filed a lawsuit against a company providing similar services in Texas. This spring, Samsung got in hot water abroad for allegedly hiring students to criticize rival HTC online and released a statement saying they would cease “all marketing activities that involve posting of anonymous comments.”

In 2009, the FTC issued updated guidelines about what is and isn’t allowed when it comes to new media. Since then, the FTC has won some hefty settlements, like $250,000 from a Nashville-based company who used marketers as “independent” reviewers for their guitar lesson DVDs. The FTC has also published letters detailing how well known companies like Hyundai, Ann Taylor and Nordstrom toed the line. The latter invited “social media influencers” to preview a new Nordstrom Rack location and gave them $50 gift cards. The FTC closed the investigation after being assured that Nordstrom “will take reasonable steps to monitor social media influencers’ compliance with the obligation to disclose gifts they receive.”

With limited resources and a broad mandate, the FTC says curbing astroturfing might sometimes best be done by other entities. “Certain cases involving smaller local or regional businesses,” Engel says, “may be more appropriately resolved by a state attorney general’s office.” People beyond the government have been policing, too. Recommendation site Yelp has organized their own sting operations, branding businesses with a scarlet letter after they proved willing to pay for kind words. Apple has long required customers to purchase an app before they could review it. And academics are using expertise in natural language processing to build algorithms that may help identify posers, even when they hide their IP addresses.

Even with efforts being made in so many sectors, astroturfing is a problem that won’t be resolved anytime soon. As with any technological offense, perpetrators’ tactics for preserving their anonymity will continue to evolve. And so long as there’s a link between good reviews and revenue, some companies will likely attempt to write those reviews themselves. Still, officials are hoping that their actions will have a deterrent effect. “Companies that continue to engage in these practices should take note,” New York Attorney General Schneiderman said in a statement on Monday. “’Astroturfing’ is the 21st century’s version of false advertising, and prosecutors have many tools at their disposal to put an end to it.” Schneirderman’s spokesman Matt Mittenthal says the 19 settlements are just a first step in the AG’s crackdown.

0 comments