"Astroturfing" With Fake Reviews Exposes A Company to Legal Risk

Sheppard Mullin Richter & Hampton LLP
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Web businesses have fueled the natural cynicism that consumers have when reading online reviews. There are too many reported instances of businesses or PR firms using employees or paid reviewers to post glowing reviews, and, in addition, mark as unhelpful negative reviews of their respective businesses.

In a letter to the Ethicist column in the NY Times (August 1, 2010), "Name Withheld" in Dallas wrote that when his company releases a new iPhone application, "our boss urges the staff to download it at the App store and give it a five-star rating, even employees who don't own a device that can run it." The employee believes fake reviews are wrong, and that his boss should not pressure employees in this way. However, the employee is torn because he wants to support his company. The Ethicist, Randy Cohen, lists several ways in which it is an unethical request for a company to make, including: (1) nobody should review an app they have not actually used; and (2) no one can review something on which their paycheck depends, or their work buddies developed, since it is an obvious conflict of interest. What the Ethicist failed to say is that fake endorsements could also expose the company to legal liability.

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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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