Opining consumers have helped spawn a whole new interactive medium in the e-commerce world, where shoppers can read and post reviews of products or services in various online forums. More so, it’s nearly impossible to peruse a retail website, such as Amazon.com[1], without your eyes being immediately drawn to those gold-filled stars which unabashedly rate that new product you are seeking. In turn, the practice known as astroturfing[2]—writing and posting fake online reviews—has increasingly become more prevalent, disrupting trust between the online consumer and the company that purports to sell that product which is the “BEST EVER!!”
Astroturfing has several different forms. Most often, a company will pay third parties to either write positive reviews about its products, services or business, or write disparaging remarks about its competitors.[3] In many cases, free products in exchange for fake reviews will often trade hands. The Federal Trade Commission is primarily responsible for policing such practices as its mission is to prevent anticompetitive, deceptive, or unfair business practices.[4] Their authority derives from Section 5 of the Federal Trade Commission Act, which declares that “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.”[5] The problem is that the FTC is limited in its size and its ability to investigate astroturfing claims and can’t possibly keep up with the consumers’ demands for shopping online.[6] This has likely caused larger companies to bring their own claims against those who participate in this unlawful practice.
Last October, Amazon filed suit against three sellers for posting reviews on its website that were allegedly paid for. Amazon claimed, in one of its suits against seller Arobo Trade INC/Aumax Direct, that over half of some 2,000 reviews across eleven products sold by the defendant were “abusive” in that they were fake.[7] They further claimed that the seller’s practices were deceptive and resulted in the deception of Amazon’s customers.[8] Another lawsuit filed against the Amazon seller, Cyande Group, stated that 52% of its reviews across four of its products were also fake and abusive.[9] A spokesperson for the company stated “[their] goal is to eliminate the incentives for sellers to engage in review abuse . . . in exchange for compensation” and that Amazon will “take enforcement and legal action against sellers participating in fraudulent reviews.”[10] These suits demonstrate that Amazon is standing up to unlawful astroturfing.
These suits followed a much larger enforcement campaign brought by Amazon in October 2015, where the company sued more than 1,000 John Does for writing fake reviews on its website.[11] Unique to this lawsuit was that reviewers were offered $5 each through the online freelance marketplace, Fiverr.com,[12] in exchange for 5-star reviews.[13] Astroturfers allegedly went so far as shipping empty boxes to themselves to make it appear as if they had purchased the Amazon products.[14] Others were found to have taken efforts to post reviews from different accounts and IP addresses.[15]
Amazon clearly sees astroturfing as a threat to its business, both for its sellers and its consumers. Astroturfing disrupts the flow of information between the buyer and seller and creates dishonesty in the marketplace.[16] Consumers are harmed by their inability to make rational choices before purchasing products and services and businesses fear reputational harm from selling a product that was represented—in a product review—to perform in a way that it didn’t.[17] The harm to businesses is also likely to be compounded by additional “real” negative reviews from the consumer that had relied on the fake review for their purchase. As astroturfing continues to harm consumers and businesses alike, private enforcement is a viable option in lieu of expansive congressional regulation. As Amazon and its competitors are uniquely positioned to police and address this deceitful practice, more companies are likely to continue the fight to help businesses protect their reputations as well as the consumers that review and purchase products from their websites.
Matthew Barish is a second-year law student at Benjamin N. Cardozo School of Law and a Staff Editor for the Cardozo Arts & Entertainment Law Journal. Prior to attending law school, he worked for Citigroup Global Markets, Inc. He’s interested in Corporate Finance and looks forward to a career in Business Law.
[1] See Amazon.Com, Inc., https://www.amazon.com.
[2] See, e.g., Oxford Dictionaries, Astroturfing Definition, https://en.oxforddictionaries.com/definition/astroturfing. Astroturfing is the deceptive practice of presenting an orchestrated marketing or public relations campaign in the guise of unsolicited comments from members of the public.
[3] See, e.g., Press Release, New York State Office of the Attorney General, A.G. Schneiderman Announces Agreement With 19 Companies To Stop Writing Fake Online Reviews And Pay More Than $350,000 In Fines (Sept. 23, 2013), http://www.ag.ny.gov/press-release/ag-schneiderman-announces-agreement-19-companies-stop-writing-fake-online-reviews-and.
[4] See About the FTC, Fed. Trade Commission, https://www.ftc.gov/about-ftc.
[5] Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (2012).
[6] See U.S. Department of Commerce, Quarterly Retail E-Commerce Sales 4th Quarter 2016 (released Feb. 17, 2017), https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf.
[7] See Sarah Perez, Amazon sues more sellers for buying fake reviews, Techcrunch (Oct. 27, 2016), https://techcrunch.com/2016/10/27/amazon-sues-more-sellers-for-buying-fake-reviews/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29 (citing
[8] Id.
[9] Id.
[10] Id.
[11] See Jacob Demmitt, After undercover sting, Amazon files suit against 1,000 Fiverr users over fake product reviews, GeekWire (Oct. 16, 2015, 1:26 PM), http://www.geekwire.com/2015/after-conducting-undercover-sting-amazon-files-suit-against-1000-fiverr-users-over-fake-product-reviews/.
[12] See https://www.fiverr.com.
[13] See Demmitt, supra note 13.
[14] Id.
[15] See Jackie Wattles, Amazon sues more than 1,000 sellers of ‘fake’ product reviews, CNNMoney (Oct. 18, 2015, 7:31 PM), http://money.cnn.com/2015/10/18/technology/amazon-lawsuit-fake-reviews/.
[16] See Krystal N. Lyons, Disinfecting Market Pathogens: Astroturfing and its Anticompetitive Impact, 20 J.L. BUS & ETHICS 121-24 (2014).
[17] Id.
