Accentuate the Positive... Eliminate the Negative (unless you're talking about consumer reviews)

The FTC and fast fashion company, Fashion Nova, LLC just agreed to a 4.2 million dollar settlement to settle allegations that Fashion Nova was blocking negative reviews of its products from being posted on its website.  This is the FTC’s first case involving a company’s efforts to hide or suppress negative reviews, but will by no means be its last. In other words, if it wasn’t before, the issue of negative consumer reviews is officially on the FTC radar.

The FTC complaint states that “Fashion Nova installed a third-party online product review management interface. The interface allows users to choose to have certain reviews automatically post based upon their star ratings and hold lower-starred reviews for client approval prior to posting. From as early as late 2015 through mid-November 2019, Fashion Nova chose to have four- and five-star reviews automatically post to the website, but did not approve or publish hundreds of thousands lower-starred, more negative reviews.”   Preventing negative reviews from being seen by consumers misrepresents the products, eliminates what could be useful and helpful information, and uses deception to boost a product’s rating.   

Additional letters were sent to other companies who offer “review management” services reminding them not so gently that they must collect the negative as well as the positive reviews to be in compliance with the FTC Act.  The FTC’s latest guidance for platforms and online retailers can be found here. 

For Platforms -  https://www.ftc.gov/tips-advice/business-center/guidance/featuring-online-customer-reviews-guide-platforms

For Marketers - https://www.ftc.gov/tips-advice/business-center/guidance/soliciting-paying-online-reviews-guide-marketers

Fashion Nova is no stranger to big settlements.  In 2020 the FTC settled with them for more than 9 million dollars based on Fashion Nova’s consumer practices. In addition to this most recent 2022 settlement, Fashion Nova will have to post negative reviews of its products (excluding those that are related to shipping and non-merchandise reviews, or reviews that are otherwise unlawful, obscene etc..).  and is barred from making misrepresentations about customer reviews or other endorsements.    

Why this Matters:  In a world in which companies increasingly rely on accurate consumer reviews to edge past the competition, it’s imperative that those reviews remain transparent and honest. In addition, this case is a clear warning to any company using these tools, that the FTC is paying attention and it plans to go after deceptive and unfair practices in this space.