In November, the Federal Trade Commission (FTC) announced that it had secured a proposed order settling the agency’s complaint against Sitejabber, a company offering an AI-enabled consumer review platform, to stop misrepresenting that the ratings and reviews it published came from customers who experienced the reviewed product or service. 

According to the FTC’s complaint, Sitejabber collected ratings and reviews for its online business clients from consumers via “instant survey” feedback requests presented to consumers at the time or point of purchase, before the customers had an opportunity to actually experience the product or service purchased. Specifically, the survey would pop up after a customer completed the online check-out process asking the customer 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.” According to the FTC, these point-of-sale ratings and reviews allowed Sitejabber to artificially inflate the number of reviews and average ratings displayed on its clients’ profile pages and to claim that the ratings “indicat[e] that most customers are generally satisfied with their purchases.” Sitejabber’s inflated ratings and review counts were also displayed in Google and other search results. 

Although there were no civil penalties, the FTC’s proposed order prohibits the company from: (i) misrepresenting, or assisting anyone else in misrepresenting, that product or service ratings collected at the point of purchase reflected the experience of consumers who had actually been able to use the product or service; (ii) making, or assisting anyone else in making, any misrepresentation about any ratings, average ratings or views it collects, moderates or displays; and (iii) providing others with the means to misrepresent that ratings or reviews collected at the time of purchase were from customers who had received or had the opportunity to experience the product or service purchased. 

Takeaway: The FTC’s settlement with Sitejabber serves as an important reminder for marketers to ensure that they do not take shortcuts to accumulate positive consumer reviews. Creating, buying or selling fake reviews may run afoul of the FTC’s Rule on the Use of Consumer Reviews and Testimonials (the “Rule”), as we previously discussed. Although the Sitejabber conduct did not violate the Rule, the settlement illustrates that the FTC may still pursue businesses for violating the FTC Act. Therefore, marketers should be sure to audit their current practices and policies with respect to consumer reviews and testimonials (including auditing and monitoring any third-party review platforms they may use) to ensure that such practices comply with the FTC’s rules and regulations.