Marketing company settles with FTC over shill iTunes reviews
updated 09:55 pm EDT, Thu August 26, 2010
Commission demands removal of reviews
Marketing company Reverb Communications has reportedly settled with the Federal Trade Commission over accusations of shill reviews for App Store titles. The FTC charged Reverb with engaging in deceptive advertising after employees posted positive reviews of iPhone games. The reviews did not contain any disclosure that the authors were actually hired by the marketing company to represent the apps.
The settlement requires Reverb and executive Tracie Snitker to remove all of the shill reviews, according to a New York Times report. The FTC has also prohibited the company from following the same course of action for any future products and services that lack proper disclosure.
The Reverb dispute marks the first time the Commission has enforced its new guidelines for Internet endorsements. The rules apply to bloggers and other entities that represent or review products through social networking services or websites.
“We hope that this case will show advertisers that they have to be transparent in their practices and help guide other ad agencies,” said FTC Bureau of Consumer Protection lawyer Stacey Ferguson.
The settlement did not include any monetary penalties or a requirement for Reverb to admit guilt.
Fresh-Faced Recruit
Joined: Aug 2001
Meh
Its a pity this did not include a large monetary fine (at least) as a warning to others. The old saw about "make an example of them" may not be totally fair, but it would probably save the FTC having to investigate thousands more cases like this.
Ironically, by netting such a weak "victory," I wonder if the FTC may in fact have sent the opposite signal to what was intended: that posting shill reviews won't actually get you in much trouble, so its worth doing till you get caught.