Online fashion retailer fined by FTC for removing negative reviews | Manatt, Phelps & Phillips, LLP
The Federal Trade Commission (FTC) has fined online fashion retailer Fashion Nova $4.2 million to settle allegations that the company blocked the posting of negative reviews of its products on its website. The FTC said this is its first case involving a company’s efforts to cover up negative reviews.
The FTC alleged in its complaint that Fashion Nova misrepresented that product reviews on its website accurately reflected the opinions of all shoppers who submitted reviews and that, in many cases, the company removed reviews. product reviews with ratings less than four out of five stars.
The FTC said in the complaint that Fashion Nova installed a third-party online product review management interface to automatically post four- and five-star reviews to its website and retain lower-star reviews for company approval. before their publication. According to the complaint, from late 2015 to November 2019, Fashion Nova failed to approve or post hundreds of thousands of less starred and more negative reviews.
The FTC said removing negative product reviews “deprives consumers of potentially useful information and artificially inflates the product’s average star rating.”
In addition to the fine, the proposed settlement prohibits Fashion Nova from making false statements about customer reviews or other endorsements. Company must publish all customer reviews of products currently sold, including all reviews that were previously hidden from the public, except reviews that contain obscene, sexually explicit, racist or illegal content and reviews that do not are not related to the Company’s products or customer service. , delivery, returns or exchanges.
The FTC announced that it is sending letters to ten companies offering review management services, advising them that avoiding the collection or posting of negative reviews violates FTC law. The FTC also issued new guidelines for online retailers and review platforms to educate them on the FTC’s key principles for collecting and publishing customer reviews in a way that does not mislead consumers.
“Deceptive review practices mislead consumers, undermine honest businesses, and pollute online commerce,” said Samuel Levine, director of the FTC’s Consumer Protection Bureau. “Fashion Nova is held accountable for these practices, and other companies should take notice.”
why is it important
The complaint against Fashion Nova makes it clear that the FTC considers the removal of negative reviews a deceptive practice in violation of FTC law. The letters sent to the ten companies offering review management services underscore the FTC’s position. The letters say the FTC is concerned when companies take improper steps to avoid collecting or posting negative reviews. “Examples may include requesting reviews only from those who are likely to leave positive reviews, preventing or discouraging the submission of negative reviews, subjecting negative reviews to further review, declining posting negative reviews or not treating positive and negative reviews equally.”
In order to avoid possible enforcement action by the FTC, companies should carefully review their policies and practices to ensure that they are not engaging in these activities.