Richard Newman Quoted by Law.com on First FTC “Review Hijacking” Case
FTC advertising compliance and defense lawyer Richard B. Newman was recently quoted in an article for Law.com titled “FTC Bags First Settlement in Probe of ‘Review Hijacking’ in E-Commerce.”
The article discusses the FTC’s first case alleging “review hijacking,” in which a marketer steals or repurposes reviews of another product. The case involves a marketer of vitamins and other supplements that allegedly carried out this tactic by merging its new products on Amazon with different well-established products that had more ratings, reviews and badges.
Mr. Newman stated, “[n]ot only is the FTC currently seeking to promulgate us that come with big civil penalties for such conduct, it has recently blanketed the digital advertising industry with warning letters.”
According to the FTC, the marketer “took advantage of an Amazon feature that allows vendors to create or request the creation of ‘variation’” relationships between some products that are similar but differ only in narrow, specific ways – such as color, size, quantity, or flavor. Products with a variation relationship share the same product detail page on Amazon.com and appear as alternative choices, so shoppers can compare and choose among similar products.”
“The product detail page of products that are in a variation relationship displays the total number of ratings, the average star rating, and the reviews for all of the products in the variation relationship,” the FTC said in its complaint. “They also share any ‘#1 Best Seller’ or ‘Amazon’s Choice’ badges.”
According to the FTC’s complaint, during 2020 and 2021, Bountiful asked Amazon to create numerous variation relationships for its supplement products with different formulations. According to one purported internal marketer communication, the FTC alleges, the company created variations with some new products “to try and ramp them faster as they were NOT selling and we wanted to give them a little boost in R[atings]&R[eviews] to gain visibility and allow them to also borrow the ‘amazon choice’ badge and best seller badge which worked.”
For example, according to the FTC, in March 2020, the company began selling two new products and requested that Amazon combine the new products in a variation relationship with three of its established products, all with different formulations. “Unfortunately people d[id] not love the [one of the products],” but sales “spiked the second we variated the pages and they continue to grow,” purportedly according to one internal company email.
The FTC’s complaint alleges that by manipulating product pages, the company misrepresented the reviews, the number of Amazon reviews and the average star ratings of some products, and that some of them were number one best sellers or had earned an Amazon Choice badge.
In addition to requiring that the company pay $600,000 as monetary relief for consumers, the proposed order prohibits the marketer from making similar types of misrepresentations and bars the company from creating a variation relationship – or using other allegedly deceptive review tactics – that purportedly distort what consumers think about its products or services.
Review hijacking is one of the deceptive or unfair practices involving reviews on which the Commission sought comment in October 2022 when it announced an advance notice of proposed rulemaking.
Contact the author to discuss how marketers and advertisers can comply with applicable legal regulations, including applicable review, ranking and endorsement best practices.
Richard B. Newman is an FTC advertising compliance and defense attorney at Hinch Newman LLP.
Informational purposes only. Not legal advice. May be considered attorney advertising.
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