PR firm busted by FTC for posting phony reviews on iTunes store
According to FTC charges, the PR firm, Reverb Communications, Inc. and its owner, Tracie Snitker, engaged in deceptive advertising practices when they failed to disclose that their employees posed as ordinary consumers and posted positive reviews of its clients' games on the iTunes store.
"Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising," Mary Engle, Director of the FTC's Division of Advertising Practices, said in a statement. "Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers."
Reverb provides public relations, marketing, and sales services to developers of video game applications, including mobile gaming apps. Between November 2008 and May 2009, according to the FTC complaint, Reverb and Snitker posted reviews about their clients' games at the iTunes store using account names that gave readers the impression the reviews were written by disinterested consumers.
Reverb and Snitker failed to disclose they'd been hired to promote the games as well as the fact they often received a percentage of the sales -- which the FTC said would have been extremely relevant to consumers considering whether to buy the gaming applications based on the glowing reviews.
Under the proposed settlement order, Reverb and Snitker will be required to remove any online reviews that misrepresent the authors as independent users or ordinary consumers and fail to disclose a connection between Reverb and Snitker and the seller of a product or service.
The agreement also bars Reverb and Snitker from ever again posting positive online reviews about a product or service while posing as ordinary consumers unless they disclose any relevant connections with the seller.
In its revised endorsements and testimonials guides issued last year, the FTC specified that while decisions will be reached on a case-by-case basis, the online post by a person connected to the seller, or someone who receives cash or in-kind payment to review a product or service, should disclose the material connection the reviewer shares with the seller of the product or service. This applies to employees of both the seller and the seller's advertising agency.
The growing reliance of consumers on user-generated reviews has resulted in a number of other phony review-for-hire incidents involving high-profile companies recent years, including Amazon, Trip Advisor and Royal Caribbean Cruise Lines.