Ramifications of Internet Posting of False Reviews
Before the onset of online commentary and reviews, consumers pretty much had to rely on word of mouth and their own instincts when evaluating whether to use a certain product or patronize a certain business. Now, with the almost ubiquitous presence of online reviews, consumers can resort to these 24/7 statements to make their purchasing choices.
The problem is that many of these reviews may be faked by businesses themselves or may be paid for. The use of five stars on many sites seems to be a major promotional factor, and too many of these sites with an online review mechanism somehow manage to show an average “star review” in the upper fours.
Is this realistic? Maybe so, though the ranking and comments may seem suspicious on the surface. Still, the average website visitor can be easily influenced. Is it worth gaming the system if you’re a business owner?
On the flip side, some businesses will resort to writing or paying for negative reviews of a competitor’s products or services. That can have a negative effect on one’s competitors with the purpose of gaining an unfair advantage for oneself.
If you’re running a business in or around Irvine, California, and you’ve been tempted to create false positive or negative reviews – or have actually done so – you may want to consider whether there are any legal consequences. You may also be a victim of a competitor’s effort to cast your company in a negative light, and you need to pursue your legal options.
In any of these situations, contact William B. Hanley, Attorney at Law to discuss your legal obligations and the consequences of any false reviews, either for or against your business. The firm proudly serves clients throughout the counties of Orange, Los Angeles, and San Diego.
Laws and Regulations Regarding False Advertising and Online Reviews
The California Business and Professions Code on False Advertising Section 17500 makes it unlawful for “any person, firm, corporation or association, of any employee thereof” to make statements that are “untrue or misleading” concerning “real or personal property or … services professional or otherwise.” The statute also mentions “in any means whatever, including over the Internet…”
The Federal Trade Commission (FTC) is also monitoring false online reviews and has begun issuing what are known as a Notice of Penalty Offenses for the use of fake online reviews and other deceptive endorsements. The penalty can be as high as $43,792 per violation.
According to the FTC website, these unfair or deceptive practices include “falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser; and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.”
In late 2022, the agency released a Notice of Proposed Rulemaking (NPRM) to combat deceptive or unfair review and endorsement practices. The public commentary period on the proposed rule has closed and the FTC is now working on finalizing the rule.
The areas of concern detailed in the NPRM include:
FAKE REVIEWS: Comments posted by nonexistent customers or by those who have not used the product or service
REVIEW REUSE FRAUD: Taking a review for one product or service and touting it for another
PAID REVIEWS: Buying positive reviews for your business or negative reviews about a competitor
INSIDER REVIEWS: Company executives and employees who post favorable comments
REVIEW SUPPRESSION: Deleting unfavorable reviews
FAKE REVIEW WEBSITES: Setting up so-called independent websites to review your company’s products or services
BUYING FOLLOWERS: Paying others to post blog posts or to like your own postings on social media
Legal Liability: Defamation Counts and So Does ‘False Light’
California law, as detailed above, makes it a misdemeanor to make false claims about your product or services, and the FTC is also on the hunt for businesses that resort to fake reviews.
There is also the legal matter of making false claims about a competitor. In this regard, the laws against defamation come into focus. If the comments or reviews you post about a competitor, or pay to have posted, resort to defamation, you can be held legally liable for any losses or damages suffered by the target of your attack. Defamation means making false claims.
California also has a law about portraying others in a “false light.” The false light standard arose from a case known as Gill v. Curtis Publishing Co. An article by that publisher showed a couple with the caption “love at first sight is a bad risk.” The couple, who didn’t know their photo had even been taken, sued for implying that their love was “wrong.” They won, and the false light law was born.
What to Do About False Reviews
If your business has been posting or purchasing false reviews, your best option is to take them down and cease the practice of faking reviews through whatever means. If you’ve been the victim of false reviews by a competitor or malicious person or entity, you may have a case for defamation or even false light litigation. In either case, you need to review the situation with an experienced business law attorney.
Protect Your Business
You don’t want your business to be attacked or defamed by others, and likewise, you shouldn’t try to portray your business in a positive light by using fake reviews and commentary. In the latter scenario, it’s eventually going to catch up with you. In January 2022, the FTC fined the fashion retailer known as Fashion Nova $4.2 million for suppressing negative reviews. That’s just one example, with more no doubt to come.
If you have questions or concerns about online reviews regarding your company’s practices or the practice of others who are negatively affecting your business, contact William B. Hanley, Attorney at Law immediately. He is a business litigation attorney with more than four decades of experience who will fight for your rights and represent you aggressively in any legal matter.