Fake Amazon Reviews Prompt FTC Action

In a statement issued on February 26th, the Federal Trade Commission announced the “first legal challenge of a marketer’s use of paid fake reviews on an independent retail site”. The FTC alleges that Cure Encapsulations Inc, paid the website, amazonverifiedreviews.com to create and post reviews of their weight loss product, producing an artificially inflated score of 4.3 out of 5 stars. In the complaint, the FTC produced several examples of the fraudulent reviews, including “Literally BLOCKS FAT From Forming” and that the product worked as a “powerful appetite suppressant” bogus claims the product maker could not back up by any reliable scientific evidence or clinical testing. 
The case was settled out of court and prohibits the defendant from making any related products or dietary supplements, and a $12.8M deferred judgement. An amazon representative quoted in The Verge said “We welcome the FTC’s work in this area. Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers”. While fake reviews have been a consistent problem across Amazon for some time, regulators have consistently pushed Amazon to police them internally. Amazon has attempted to do so by filing lawsuits against fraudulent review selling sites. This action by the FTC sets a precedent for future prosecution, and a growing level of interest in abusive practices in the tech industry from the FTC, including the launch of a 17 attorney commission to monitor anti-competitive practices in the US tech market. 
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