FTC Announces Settlement Over Fake Reviews

Kelley Drye & Warren LLP
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This week, the FTC announced a settlement with Sunday Riley Modern Skincare and its CEO, Sunday Riley, over allegations that company managers and employees posted fake reviews on Sephora.com.

The FTC alleged that company managers, including Ms. Riley herself, posted reviews of the company’s products on Sephora.com, and asked other employees do the same. When Sephora removed some of the reviews, managers suspected it was because Sephora recognized they were coming from IP addresses associated with the company. Rather than pull the plug on the scheme, managers obtained an Express VPN account to “allow us to hide our IP address and location when we write reviews.”

The complaint also quotes from e-mails Ms. Riley wrote to employees instructing them in detail about how they could leave reviews, directing employees to focus on certain products that should always have five stars, and instructing employees to dislike negative reviews posted by others. “If you see a negative review – DISLIKE it,” Ms. Riley wrote. “After enough dislikes, it is removed. This directly translates into sales!!”

The proposed order prohibits the company and CEO from misrepresenting that a review was written by an independent consumer and requires them to clearly disclose any unexpected material connection between a reviewer and the company. Moreover, the company must instruct employees and agents about their responsibilities to clearly disclose their connections to the company in any endorsements.

If you read this blog, you already know that you shouldn’t post fake reviews, but do other people in your company know that, too? Now may be a good time to look through your employee policies to see if they address these types of issues.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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