FTC Cracks Down On Marketing Firm That Put Up Fake Reviews In iPhone App Store

from the review-turfing dept

While lots of us were quite concerned about how the FTC might enforce its seemingly arbitrary new disclosure guidelines, so far, it should be admitted, that the FTC has enforced these new rules carefully. It did, for example, warn clothing retailer Ann Taylor for giving gift cards to bloggers who covered their new line of clothes. That was interesting in that it targeted the retailer, rather than the bloggers themselves -- but was potentially problematic in that blaming a retailer for potential actions of bloggers doesn't seem like correct application of liability. Still, in that case, the FTC only issued a warning.

Now the FTC has announced a settlement with marketing firm Reverb Communications, who was accused of writing fake reviews of apps in the iPhone app store. This FTC action makes sense, as it's clearly a case of someone passing off a review as legit, when it was part of a marketing campaign:
That said, you could argue, at this point, that most people recognize that some percentage of online reviews come from insiders or friends anyway. And, considering that the FTC's explanation for why such rules did not apply to celebrities was that most people understand that celebrities get free stuff all the time, this all seems like something of an arbitrary standard. I don't have a problem with the FTC cracking down on these fake reviews, but it's still not clear that the FTC has an objective standard here, rather than an arbitrary one.
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Filed Under: deception, ftc, marketing, reviews
Companies: ftc, reverb communications

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  1. identicon
    Reverb, 27 Aug 2010 @ 7:39am

    Reverb Statement

    Reverb Statement:
    During discussions with the FTC, it became apparent that we would never agree on the facts of the situation. Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion because as the FTC states: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.'

    This issue was specific to a handful of small, independently developed iPhone apps that several team members downloaded onto their personal iPhones in their own time using their own money and accounts, a right and privilege afforded to every iPhone and iTouch user. Any iTunes user will understand that each time a product is purchased you are allowed to post one comment per product. Seven out of our 16 employees purchased games which Reverb had been working on and to this the FTC dedicated an investigation. These posts were neither mandated by Reverb nor connected to our policies. Bottom line, these allegations are old, this situation was settled awhile ago and had nothing to do with the clients that many outlets have been reporting. The FTC has continuously made statements that the reviews are “fake reviews” something we question; if a person plays the game and posts one review based on their own opinion about the game should that be constituted as “fake?” The FTC should evaluate if personal posts by these employees justifies this type of time, money and investigation. It’s become apparent to Reverb that this disagreement with the FTC is being used to communicate their new posting policy. We stand by the statement from the FTC that: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.'

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