FTC Settles Case Against Internet Marketers Over Fake iTunes Reviews
By Anna Johnson on August 31st, 2010Last Thursday the U.S. Federal Trade Commission revealed that California based Reverb Communications had settled charges over posting fake reviews in Apple’s iTunes store.
The FTC had charged Reverb over engaging in deceptive advertising by having its employees write and post positive reviews of clients’ games in the Apple iTunes Store, without disclosing that they were being paid to do so.
The FTC’s charges against Reverb Communications were the first to be brought under the auspices of the ‘Guides Concerning the Use of Endorsements and Testimonials in Advertising’ introduced in late 2009. (See Special Report: FTC Revises Its Guidelines On Advertising Endorsements and Testimonials – How Does This Affect Internet Marketers? and How Do The FTC’s Guidelines Affect Affiliates and Merchants? for more information.)
The FTC had alleged that Reverb employees, including executive Tracie Snitker, had posted positive reviews about clients’ games from November 2008 to May 2009. According to the FTC, Reverb staff had used account names “that would give readers the impression that they had been placed by ordinary consumers.”
The FTC didn’t name the game developers in its complaint, although Reverb’s website lists more than 60 current and former clients, including Digital Leisure, Harmonix and MTV Games.
The settlement requires Reverb Communications and Tracie Snitker to remove all of the relevant iTunes reviews, and bars Reverb and Ms. Snitker from making similar endorsements of any product or service without disclosing any relevant connections.
Interestingly, the settlement did not involve any monetary penalties or admission of lawbreaking. This indicates to me that the case wasn’t as clear-cut as it may first appear.
For her part, Tracie Snitker said that her company and the FTC disagreed over the facts of the situation and:
“Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion.”
According to Jonathan Zittrain, Harvard Law School professor and co-founder of the Berkman Center for Internet and Society, the FTC’s action indicates that the FTC doesn’t intend to use the new Guides to target “the individual blogger or Twitterer, but rather a professional endorser.”
Furthermore, Professor Zittrain said the case will help marketing companies resist pressure from clients to post fake reviews and engage in other misleading and deceptive practices:
“When a client says ‘Where are my good reviews? I am paying for them,’ you can say, ‘We can’t do it because it is illegal.’”
Source: Miguel Helft, “Charges Settled Over Fake Reviews on iTunes,” The New York Times, August 26, 2010
