This week, the FTC announced a proposed settlement with GGL Products, dba Sitejabber, an artificial intelligence-enabled review platform. Charging the company with violation of Section 5 of the FTC Act, and providing the means and instrumentalities for the commission of deceptive acts and practices, the complaint alleges that Sitejabber deceived consumers by misrepresenting the ratings and reviews it published about its clients' products and artificially inflating companies’ average ratings and review counts. 

The platform hosts company profile pages on Sitejabber.com featuring star ratings and customer reviews. To populate those reviews and ratings, the platform offers a tool for companies to gather and manage customer reviews through instant surveys.  And there’s the rub: while these automated instant surveys are served up to shoppers at point of purchase, eliciting shoppers’ experiences “about your shopping experience so far,” the responses are then displayed as product reviews and aggregated for purposes of star ratings. This is deceptive because, as alleged in the complaint, “[p]resenting [the instant feedback survey] results as post-fulfillment reviews and ratings can mislead consumers into believing that a business's high review count and high rating means thousands of customers have had positive experiences with the business's products or services, when in fact the ratings and reviews displayed primarily reflected only customers' experiences shopping on the business's websites.”

Further, Sitejabber did not disclose clearly and conspicuously that the rating it displayed for each company included ratings from customers who had purchased but not yet received their products. To get a breakdown and explanation of the aggregated star rating, a shopper would have to hover on the review count to see a mouseover disclosure, and also have to search on a business’s profile page for more information, also in mouseover disclosures. In other words, a very savvy and curious shopper could figure out – by really looking -- that the reviews and ratings were just about the shopping experience and not about the products, but the more casual shopper probably would not. 

Worse, these star ratings and reviews could, and would, be used by companies on their own sites, and in search ads, conveying an inflated impression of customer positivity about the products.  One glaring example cited in the complaint is an online furniture seller whose Sitejabber profile showed 83,153 reviews, with an average rating of 4.72 stars. However, of these reviews, over 98% were point-of-sale instant feedback survey reviews. Fewer than 1% were from verified purchasers. Without the survey-produced reviews, the business's Sitejabber profile page would have only shown 1,443 reviews, and an average rating would have been 2.19 stars.

Not surprisingly, the proposed order – which includes no monetary payment -- prohibits Sitejabber from misrepresenting, or assisting anyone else in misrepresenting, that the average customer rating, number of ratings or reviews, or any rating or review, reflects the views of customers who actually received the product or service. It also bars Sitejabber from making or assisting anyone else in making any such misrepresentations.

Some take-aways: 

Obviously, the FTC continues to be very focused on the consumer review eco-system and protecting its hygiene and utility.

Even if conduct does not fall squarely within the FTC’s Rule On the Use of Consumer Reviews and Testimonials (which the conduct here did not, preventing the FTC from using its Notice of Penalty Offenses authority to get civil penalties), the FTC can still go after a company for misrepresenting product reviews in violation of the FTC Act.

Platforms and widget makers must be mindful of “means and instrumentalities” liability if their tools, as here, as noted by Commissioner Ferguson noted in his Concurring Statement,  “serve[…] no purpose other than to deceive consumers.”  Companies working with platforms and tool providers for review collection should choose their vendors wisely.

Are reviews of a shopping experience intrinsically invalid? Absolutely not. As we know from the FTC’s own prior statements (for example, in the Yotpo Closing Letter), a consumer’s review can appropriately include her experience with the company’s customer service team, its shipping and returns policies and practices, and more. Presumably even a consumer's shopping experience itself could be relevant to other shoppers. However, how a shopper feels about a company’s customer service and the ease of using the company's website is not necessarily the same as how the shopper feels about the product itself and companies should not conflate the two in their marketing and star ratings.

And, of course, disclosures are not a cure-all for deception. Important information, like the fact that reviews are based on ease of purchase rather product satisfaction, can’t be put into hard-to-find disclosures. The clear and conspicuous standard applies for customer reviews too.