Subscribe

RSSAdd blog to your RSS reader

All Topics

Contact Us

212.451.2258

ADVERTISING@OLSHANLAW.COM

FTC Settlement with Trampoline Marketer Shows Risk in Using Fake Review Sites

The FTC considers review sites to be advertising and will hold marketers responsible for their content

The Federal Trade Commission has agreed to settle its charges against two brothers who used fake review sites that displayed positive reviews of their trampoline products. The settlements are a clear warning that the FTC considers review sites to be advertising and will hold marketers responsible for their content.  

The FTC charged two brothers, Son “Sonny” Le and Bao “Bobby” Le with creating fake review websites for their Infinity Trampolines and Olympus Pro Trampolines. The brothers then linked the trampoline product pages to the fake review sites.  Further, when leaving positive reviews of their products on legitimate third party platforms, the brothers omitted disclosure of the material connection existent between themselves as reviewers and advertisers. The FTC alleged that the advertising methods utilized constituted deceptive conduct.

Each of the websites used to sell the trampolines featured the “Trampoline Safety of America” logo. Additionally, the Infinity Trampoline website featured the “Bureau of Trampoline Review” and “Top Trampoline Review” logos. Some of the logos also appeared with the claim “Trampoline of the Year.” Each of these three organizations claimed, on their own websites, to arm consumers with unbiased evaluations of different trampolines, focusing on safety and performance. All three websites unreservedly recommended Infinity and Olympus Pro trampolines.

The FTC discovered, however, that Respondent Son Le owned all three of these websites, and both Son Le and Bao Le regulated the content disseminated on the sites. In fact, these “fake” review websites were allegedly implemented by the Respondents to advertise and legitimize their products. The FTC alleged that, in representing these organizations as unbiased, independent entities, the Respondents deceived consumers. The FTC also found that the Respondents had commented on a YouTube clip that the Infinity was “the best trampoline that I’ve ever owned,” and an apparent blog “Trampoline Mom” featured a comment relating to the Respondent’s trampolines. The Respondents consistently failed to disclose their material connection with the advertiser.

In discovering that the Respondents were responsible for the content displayed on the review websites and the comments left on third party sites, the FTC filed a complaint against the brothers. The complaint alleged that the Respondents had made false claims on both the review websites and the websites through which they sell their products that featured the logos of these fake organizations. Further, the FTC claimed that the Respondents violated Section 5(a) of the Federal Trade Commission Act by failing to disclose the material connection they had with the Infinity and Olympus Pro trampolines.

On May 31, 2017, the FTC released a proposed consent order. The consent order stipulates that the Respondents will be prohibited from misrepresenting reviews and making deceptive claims regarding tests, studies, and research. Further, the proposed settlement requires the Respondents to clearly and conspicuously disclose any unexpected material connection between a consumer, reviewer, or endorser, and any Respondent or other entity connected to the product. The proposed consent order is available for public comment until June 30, 2017.

Takeaway: Advertisers should be aware of their obligations in advertising their products online. Creating fake review sites, displaying misleading seals, and reviewing their own products on third party sites without disclosing the existent material connections with the advertiser could attract the attention of the FTC, and may result in a complaint being filed against the advertiser.

Morgan Spina, a law clerk in Olshan's Intellectual Property and Advertising, Marketing & Promotions practice groups, assisted in the writing of this blog post.