Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC stops consumer review platform from misrepresenting reviews, (Nov 7, 2024)
Organizations Mentioned:GGL Projects, Inc.
By Peter Reap, J.D., LL.M.
A proposed settlement of the FTC’s charges will halt the alleged deception that reviews it published came from people who actually experienced the product or service.
Sitejabber, a company that provides a consumer review platform that is enabled with artificial intelligence (AI), has agreed with the FTC to be prohibited from misrepresenting to consumers that the site’s published ratings and reviews come from real customers who experienced the reviewed product or service, and from artificially inflating average ratings and review numbers. The proposed consent order, if approved by the Commission, will settle the FTC’s administrative complaint, the agency announced (In the Matter of GGL Projects, Inc., FTC File No. 232-3060).
GGL Projects, Inc., which does business as Sitejabber, collected ratings and reviews for its online business clients from consumers at the time of purchase, before they received or had the chance to experience the products or services they bought. For example, after online customers checked out, they were asked to “rate your overall shopping experience so far” on a 5-star scale and then to “type a quick message about your shopping experience so far.”
The agency’s complaint alleges that Sitejabber violated Section 5(a) of the FTC Act by misrepresenting that point-of-sale ratings and reviews reflected the experiences of consumers who had actually received and had the opportunity to experience the product or services purchased. The complaint further alleges that Sitejabber provided its business clients with the means and instrumentalities to deceive consumers that product reviews and ratings collected at the time of purchase and displayed on the clients’ websites were from consumers who had received and had the opportunity to experience the product being reviewed. Sitejabber’s product review tools allowed its customers to publish this feedback on their own websites as product reviews and ratings.
Proposed order. The proposed order contains provisions designed to prevent Sitejabber from engaging in these and similar acts and practices in the future. Sitejabber is prohibited misrepresenting:
That the average customer rating or total number of ratings or reviews of a product, service, or business reflects only the ratings or reviews of customers who have received the product or service purchased and had the opportunity to experience the product or service purchased;
That any rating or review of a product, service, or business collected at the time or point of purchase was collected from a customer who: (1) received the product or service purchased, or (2) had the opportunity to experience the product or service purchased; and
about misrepresenting any ratings, average ratings, or reviews that they collect, moderate, or display.
The proposed order would also prohibit Sitejabber from providing others with the means or instrumentalities to misrepresent that product or service ratings or reviews collected at the point of purchase were collected from customers who had the opportunity to experience the product or service purchased.
The agreement also contains reporting and compliance provisions; including the FTC’s continued compliance monitoring of Sitejabber’s activity during the next 20 years.
The Commission vote to issue the administrative complaint and to accept the consent agreement was 5-0.
Levine comments. FTC Bureau of Consumer Protection Director Samuel Levine said: “Platforms don’t have free rein to mislead people about the consumer reviews shown for companies and their products. Along with our rule on fake reviews and testimonials, cases like this one show that we’ll act to stop all forms of deception in the review ecosystem.”
Commissioner statements. In a statement, Commissioner Ferguson said that this case presents some of the same issues presented in the Commission’s recent action against the artificial-intelligence platform Rytr, from which he dissented. “Although someone could have used Rytr’s tool to deceive consumers, the tool also had substantial lawful uses. Sitejabber’s instant product reviews and the widgets by which its clients displayed them on their own websites, however, served no purpose other than to deceive consumers. Indeed, it appears that Sitejabber’s very purpose in offering the widgets was to assist its clients in deceiving consumers.”
In her separate statement, Commissioner Holyoak echoed Ferguson, stating that “[u]nlike the Commission’s Complaint against review writing platform Rytr, this Complaint properly alleges that Sitejabber provided the “means and instrumentalities” to deceive consumers.”
Companies: GGL Projects, Inc.
News: ConsumerProtection FederalTradeCommissionNews AINews