Aug 27, 2010 (10:08 AM EDT)
FTC Settles Fake iTunes Reviews Case

Read the Original Article at InformationWeek

The Federal Trade Commission on Thursday said that it had settled charges of deceptive advertising with a public relations agency accused of shilling for developers of iOS games in Apple's iTunes App Store.

The company, Reverb Communications, and its owner Tracie Snitker, are accused of posting rave ratings (four or five stars) and reviews for iOS games on iTunes from November 2008 through May 2009.

"[T]he reviews for those gaming applications were not independent reviews reflecting the views of ordinary consumers," the FTC complaint says. "The reviews were created by employees of Reverb, a company hired to promote the gaming applications and often paid a percentage of the applications' sales."

Mary Engle, director of the FTC's Division of Advertising Practices, said in a statement that companies involved with online marketing must adhere to established truth-in-advertising principles.

"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," she said.

The FTC last year updated its guidelines for endorsements and testimonials to require that those posting online reviews who are connected to, or paid by, the seller disclose that relationship.

Nevertheless, fake reviews represent a longstanding problem that's unlikely to disappear any time soon. Last year, for example, Mark Reynoso, president of computer peripheral maker Belkin, apologized after "we discovered that one of our employees may have posted a number of queries on the Amazon Mechanical Turk Web site inviting users to post positive reviews of Belkin products in exchange for payment."

Also last year, online travel site TripAdvisor posted a warning to the effect that certain hotels listed on the site appeared to be attempting "to manipulate our popularity index by interfering with the unbiased nature of our reviews."

Companies that rely on user-generated content have tried to deal with the issue. Apple in 2008, for example, changed its review policy to require app reviewers to have purchased the app being reviewed.

But such measures haven't eliminated the problem. The issue is further complicated by the fact that the online companies hosting fake reviews generally benefit from shilling: Better reviews tend to mean greater revenue.

Convincing companies to take steps that will reduce sales remains a hard sell.