On March 15, 2011, the FTC reported that it entered into the first settlement agreement under the new FTC Guidelines prohibiting fake reviews. Essentially, the Guidelines provide that when someone posts a positive review of a service or product and that person is either connected to the seller receives some sort of compensation for the positive review, the “material connection” between the reviewer and the seller of the product or service must be disclosed. In this case, Legacy Learning, a company which provides guitar lessons on DVDs, had an affiliate review program which compensated bloggers and other online publishers for posting positive reviews about its program. The company agreed to pay a $250,000 penalty for its actions.
I wonder if the FTC is monitoring amazon.com. I was just reading recently about an author who was artificially inflating his sales ratings by buying his own book and posting fake positive reviews. Not only is this morally reprehensible, but it also violates the “new” FTC Guidelines which went into effect in December 2009. I wonder how many businesses engage in this conduct – posting fake reviews on sites like angieslist.com and urbanspoon.com?
In the eyes of the law 
This case raises many interesting points of concern in the way we conduct business today. With so much commerce occuring in cyberspace, it’s difficult to see the hardline connections between sellers and their product. Reviews are heavily relied upon in order to trust these unknown sellers who essentially live in ‘the cloud.’ With no brick and mortar location to go to and demonstrate your discontent with a purchase, consumers are more and more reliant on the word of mouth of fellow consumers. While this ruling addresses positively inflated reviews, I wondered about the protection of the seller against negative reviews that are posted merley for malicious intent. A bad review can be detrimental, especially for a smaller business. If a person bore a grudge against the seller, does the seller have any authority to protect him/herself? It is obvious that this would not likely be in the best interest of the seller, but nonethelss, can a false review, be it positive or negative, be dubbed illegal if it is not fairly representing an honest opinion based soley on the product itself?
I read a few different blogs that cover all kinds of interests. One in particular called doobybrain.com is a blog about internet culture, biking, some technology, and some street fashion. The blogs writer Herman Yung, posts about products he is interested in all the time, and at some times small retailers will send him products that he will then review and talk about on his blog. Im not sure if he gets paid to do this aside from receiving free merchandise, but i think its a good way for bloggers and small retail entities to have a mutually beneficial relationship that is based on common interest rather than just cash. With consumer web resources like Urbanspoon that are updated by users, there isnt really any filter on what can be said and by exactly whom. This poses a problem that cannot be easily combatted in any formal way. Everyone can be anyone on the internet, and that is the weakness that these people are exploiting. Its amazing that the writer selling his book on amazon would do something like that to get ahead. I trust amazon will monitor product sales more closely and such a scam wont happen again. Its good to see that the FTC has decided to do something about this issue and it will be interesting to see how they combat it in the future.
There is an entire industry around fake reviews. There are companies dedicated to fake book reviews alone. It’s common knowledge. See a disproportionate number of 4 and 5 star ratings? Fake reviews. It seems no one can bring themselves to post a fake mediocre or the odd negative review just to make it look natural. So just accept that all reviews just like all testimonials are FAKE!, and you will be right most of the time.
While I also agree that websites should not be able to fabricate reviews and that they should disclose compensatory measures, I still believe it is an arduous task for the FTC to monitor these sorts of practices. There are other methods in which online reviews can be misleading, potentially. For instance, besides a firm paying someone to write a good review, that same firm could pay someone to write a bad review for a competing firm or product. I suppose that I simply cannot imagine how the FTC could effectively punish or administer their newly constructed guidelines without compelling firms to enact in alternative strategies so that they may accomplish the same thing. Personally, I use websites like yelp.com to assist in formulating consumer decisions, but usually take it with a grain of salt. To me, the internet still seems like an unregulated database that reflects the incentives of millions of anonymous users or proxy accounts. Consequently, most of the reviews that I do read are not highly influential on an individual basis. Instead, I read various reviews and formulate my decision on an aggregate basis to avoid any particular bias. That said, while denoting whether or not a reviewer was compensated by a firm sounds reasonable for legal purposes, it does not provide any additional protection for me – considering my consumption habits. I think if the FTC can create a way to fully regulate reviews to the extent that they can deter any form of deceit, then it would be appropriately beneficial. Until then, however, I will remain cynical when browsing through consumer reviews.
I strongly believe websites should not be allowed to fabricate reviews posted on their site to make them appear to be more superior than others. My mom owns a restaraunt in the Wimberley area and has reviews posted all over Yelp! and Urbanspoon. One thing that Yelp! does that I find to be beneficial, not only to restaraunters who want an honest opinion of local restaraunts but for competeing business as well, is if an alloted number of positive reviews are given then it removes your reviews from Yelp! until one with not so high remarks is posted. I think this is a smart way for Yelp! to work as it is used and meant to benefit those who want a good restaraunt with solid reviews not just friends of friends of the owner boosting ratings. And this very reason is why I dont use the internet for shopping or for any types of reviews of places, im very old fashioned in that sense and believe I am my own critic. I will go to anyplace and keep an open mind and not let the reviews make my decisions for me.
I also believe that business’s that have an active comment board should not be allowed to deceive people by making things sound better then they really are. I feel as though this says a lot about a business’s core meaning, being unethical. I refer to business’s reviews all the time and there definitely have been a few restaurants I have eaten at or movies I have watched because they have a strong review on a website. Many times I have been very unhappy wasting money on unreliable sources. I believe that people should not rely on reviews and if they do then should proceed what ever money spending moves they make with caution since 50% of the time these reviews turn out to be very unreliable. I believe that if you are going to make a decision based on a review, it should be coming from somebody you know and not from the world wide web. Who knows who’s on the other side of the review screen….
I feel like so many sites that rely on customer feedbacks are always filled with fake comments from either employees or friends of the company. It is unfortunate really because we as consumers really do rely on other people’s views to make decisions when buying online. Any kind of product such as nutrional supplements do this a lot, and i am surprised that they do not do more to prevent it…it is so hard to tell when someone is from the company or an actual consumer when it is just being typed.
This brings up the new issues that the emergence of the Internet has brought in our society. We do more shopping online now than we ever have and we like to read and research things before purchasing. With this the consumers deserve some consideration. Posting fake reviewa is an awful and shallow way to cheat businesses into sounding and appearing to be very popular. When in reality, we can not get a true gauge for how the company actually operates on its own.
It seems as time passes, anything and everything is slowly becoming more and more regulated. This definitely becomes a problem when it is evident that these restrictions have put limits on our liberty. However, the “new” FTC guidelines seems to be very beneficial with little to no cons. The law of ethics seems to be slowly diminishing in today’s society as well, which may be a direct result or consequence of today’s regulated society. My boyfriend’s uncle owns and runs a small business mainly through eBay and he said that they do have restrictions on reviews. It seems like putting an honest reputation in jeopardy is motive enough to be honest with online reviews.
There are probably a lot of companies and people that partake in this practice. I remember when I was shopping around for a new phone that it was so hard to find a negative review on AT&T website about their products. The reviews were supposedly posted by real people, but I do not think that is true. I wonder how FTC is going to punish everyone that commits this fraud.