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October 26, 2019 09:34 pm

America's Trade Commission Accused of 'Rewarding Bad Actors' Posting Fake Online Reviews

Ars Technica quotes the CEO of a fraudulent-review tracking company who says that fake reviews online have now reached 'epidemic proportions". But two U.S. regulators say that's just the beginning:Commissioners Rohit Chopra and Rebecca Slaughter of the Federal Trade Commission say it's about to get a lot worse, and they know who to blame: their own agency. The FTC this week brought its first case against a company for enlisting its employees in a coordinated fake-review campaign to boost sales. Chopra and Slaughter say the decision reached by their fellow commissioners could usher in even more review fraud. The settlement did not require the company to admit fault, notify customers of the fraud, or turn over any ill-gotten gains. "Dishonest firms may come to conclude that posting fake reviews is a viable strategy, given the proposed outcome here," Chopra said in a statement dissenting from the FTC's decision, joined by Slaughter. "Honest firms, who are the biggest victims of this fraud, may be wondering if they are losing out by following the law. Consumers may come to lack confidence that reviews are truthful...." [T]he FTC voted 3â"2 to allow Sunday Riley to settle the charges by agreeing not to post future fake reviews, without admitting fault. Chopra and Slaughter say the settlement will ultimately do more harm than good and that it tells companies there's little risk in engaging in online review fraud; even if regulators find the fake reviews, the company won't face a meaningful punishment, the dissenters say. FTC staffers told Ars Technica that it's extraordinarily rare for the FTC to get a fake-review case "as straightforward, prosecutable, and evidence-rich" as this one. The FTC's investigation began when an inside whistle-blower shared a company email on Reddit in which employees "were given step-by-step directions on how to post fake reviews" -- and on how to avoid detection.

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