#1: Are Fake Reviews Legal?
No. Fake reviews violate a myriad of marketing and advertising laws. Here’s what the Federal Trade Commission has to say about them:
“[Endorsements] must reflect the honest opinions, findings, beliefs or experiences of the reviewer.”
It’s simple, are fake reviews considered “honest opinions, findings, beliefs of experiences of the reviewer”? We don’t think so.
Not to mention, if fake reviews are used in a commercial capacity, the FTC could charge you with violating Section 5 of the FTC Act. It also can be considered unfair competition and violates the Lanham Act. And don’t think these types of violations don’t come without punishments.
“If an endorser is acting on behalf of an advertiser, what she or he is saying is usually going to be commercial speech – and commercial speech violates the FTC Act if it’s deceptive. The FTC conducts investigations and brings cases involving endorsements under Section 5 of the FTC Act, which generally prohibits deceptive advertising.” - The FTC
Fake reviews ruin reputations and can cost companies to lose customer trust and in return, revenue. With that much at stake, companies who fall victim to a malicious fake review can hire an attorney and seek an injunction against the publisher of the phony review.
#3: You Can’t Just Blame Your Affiliates
Okay so technically, your company didn’t post the fake review yourself, so you’re not responsible right? Wrong. The FTC makes it clear that marketers and businesses are responsible for the actions of the affiliates who promote their products. This means that if an affiliate, whether it be a store that sells your product or an influencer that endorses it, violates marketing regulations, businesses can be held liable.
#4: Honesty Is the Best Policy
The easiest way to avoid legal trouble is to tell the truth in your marketing. Sure, you might be able to get away with a little “puffery” but that doesn’t mean you can straight up lie. Lying deceives customers and deception is a violation of marketing and advertising rules. If the FTC catches your company in a lie, it may fine you.
#5: Misleading is Not Okay Either
Just because the FTC prohibits lying in promotional material, doesn’t mean they’re okay with misleading people. In fact, the FTC’s prime focus is to protect consumers against fraud and deceptive marketing. Don’t mislead people in your advertising.
#6: Disclose Til You Can’t No More
Disclosures need to be clearly visible and written in a way that an average person can understand. This means it’s not okay to hide a disclosure behind a single footer link that takes you to a 30,0000-word legalese wall of 8px text. Say goodbye to the days when businesses were protected by purposely confusing- but legal- disclosures and user agreements. Now, the FTC has stated, “... each new endorsement made without a disclosure could be deceptive because readers might not see the original blog post where you said you got the product free from the manufacturer.” And “a disclosure on a profile page isn’t sufficient because many people in your audience probably won’t see it. Also, depending upon what it says, the badge may not adequately inform consumers of your connection to the trade association. If it’s simply a logo or hashtag for the event, it won’t tell consumers of your relationship to the association.”
Don’t know the best way to approach disclosures? Our Internet law attorneys know how to help you craft disclosure language that complies with the FTC’s standards.
#7: Dropping in Search Engine Ranking (SEO) Could Be Considered A Legitimate Harm
Writing a fake review to sabotage the competition could cause their website to drop in search engine ranking, causing them to lose business. If the defamed company chose to fight this loss by filing a defamation lawsuit, they would need to prove harm and a drop in search ranking could qualify as a sufficient harm because it ties to a loss in business or sales. However, this is an area of law that is still relatively uncharted.
#8: Don’t Use Photos of Celebrities or Public Figures Without Permission
Using a photo of a celebrity or public figure in marketing and on your business’ website to make it look like an endorsement is not ok. You need permission to do this, which usually results in a contract where you pay the celeb to endorse your product. Yes, using a royalty free picture technically doesn’t require permission, but using it deceptively to insinuate an endorsement is not allowed.
#9: Family and Employees Must Disclose Their Connection to The Company
The Federal Trade Commission considers familial and professional relationships to be material and insists that all material connections are disclosed in promotional and marketing materials.
“Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers.” - The FTC
#10: Watch Out for Fines
If you do choose to disregard these rules, you’ll want to prepare for the possibility of paying a giant fine to the FTC- and they don’t mess around. Not only will they take your money, but they’ve also been known to repossess everything from houses to mink coats and even assets from family members.