FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
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Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#2> Finally, the order imposes a judgment of $12.8 million, which will be suspended upon payment of $50,000 to the Commission and the payment of certain unpaid income tax obligations. If the defendants are later found to have misrepresented their financial condition to the FTC, the full amount of the judgment will immediately become due.
That's an interesting way of structuring the penalty.
I wonder how enforceable it would be.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#3> Finally, the order imposes a judgment of $12.8 million, which will be suspended upon payment of $50,000 to the Commission and the payment of certain unpaid income tax obligations. If the defendants are later found to have misrepresented their financial condition to the FTC, the full amount of the judgment will immediately become due. That's an interesting way of structuring the penalty. I wonder how enforceable it…
Why wouldn't it be enforceable? It's a court order.
It's also quite standard: https://www.ftc.gov/news-events/blogs/business-blog/2016/03/...
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#4I still don't understand why Amazon has done so little to combat the plague of fake reviews. It seems like it's something that's going to blow up eventually and bite them.
Along those lines: why do they still value reviews that aren't associated with a purchase? This is the logical first step.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#5Not clear if this is mostly a "wonder food false advertisement" enforcement, or a "false review" enforcement.
Maybe this was an easy "starter case" to advertise (ha ha) the new FTC position.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#6There are so many fake reviews on Amazon that the "average" stars for a product are no longer reliable indicators of quality. Especially for cheap electronics (read: headphones), products that have only been listed for a month somehow have hundreds of 5 star glowing reviews.
When I do research nowadays I have to deliberately select the 1 star reviews to see if there is a real issue that's glossed over by the paid reviews.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#7I still don't understand why Amazon has done so little to combat the plague of fake reviews. It seems like it's something that's going to blow up eventually and bite them. Along those lines: why do they still value reviews that aren't associated with a purchase? This is the logical first step.
I think you can assume that Amazon operates in its own best interest. If fake reviews were hurting sales, it'd stop them within weeks. I'm guessing, for the time being, they're helping sales. Although, I haven't bought anything on Amazon in 3 years now, and I never will again. I think this problem is creating HUGE long-term downsides. Those are a lot tougher to calculate/quantify than the short-term benefits, though.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#8I still don't understand why Amazon has done so little to combat the plague of fake reviews. It seems like it's something that's going to blow up eventually and bite them. Along those lines: why do they still value reviews that aren't associated with a purchase? This is the logical first step.
> Along those lines: why do they still value reviews that aren't associated with a purchase? This is the logical first step.
Sometimes I review products on Amazon that I purchased elsewhere to help others who might be considering the product. If we didn't have fraud, those would be really useful.
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#9> Finally, the order imposes a judgment of $12.8 million, which will be suspended upon payment of $50,000 to the Commission and the payment of certain unpaid income tax obligations. If the defendants are later found to have misrepresented their financial condition to the FTC, the full amount of the judgment will immediately become due. That's an interesting way of structuring the penalty. I wonder how enforceable it…
Why wouldn't it be enforceable? It's a court order. It's also quite standard: https://www.ftc.gov/news-events/blogs/business-blog/2016/03/...
My apologies. I should have said "recoverable" rather than "enforceable."
I would assume that if a company is in trouble with the FTC, it's probably not in the best financial shape after paying even the costs associated with the suspended judgment. So if the FTC finds that the company made an omission and the full judgment comes due, will it actually recover that money? Or is the point to just fine them out of existence, without concern for actually recovering the money?
Re: FTC Brings First Case Challenging Fake Paid Reviews on an Indie Retail Website
#10There are so many fake reviews on Amazon that the "average" stars for a product are no longer reliable indicators of quality. Especially for cheap electronics (read: headphones), products that have only been listed for a month somehow have hundreds of 5 star glowing reviews. When I do research nowadays I have to deliberately select the 1 star reviews to see if there is a real issue that's glossed over by the paid rev…
I always search for negative information first. When using a search engine for a product I always append "sucks", "broken", etc.
Generally speaking three star reviews are the most informative to me.