New Court Decision Address Handling Revisions
Because consumer reviews are so important in today’s marketplace, many companies are going to great lengths to increase their number of positive reviews. Sometimes they go too far. We’ve written about FTC and NAD cases in which companies solicited reviews without properly disclosing them and even cases in which companies solicited false reviews. (Click on hereeg.) Recently, a federal court considered similar issues in the context of a Lanham Act case.
NatureWise sells supplements on Amazon. Vitamins Online, a competitor, found that many reviews for NatureWise supplements seemed suspicious. For example, several early five-star reviews were posted by unverified buyers within minutes of each other and had similar patterns in their text, suggesting a common authorship. And a number of reviews – some of which spoke of great results after weeks of using the product – were posted even before the product was launched.
The problems did not end there. Although NatureWise denied doing so, the court found that the company offered free products in exchange for writing reviews, in violation of Amazon policies. (Undisclosed inducements also violate FTC endorsement guides). And to make matters worse, NatureWise asked its employees to “upvote” good reviews and “upvote” bad reviews. This directly affected which reviews appeared at the top of product pages and which did not.
The court found that “due to NatureWise’s block voting practice, the number of helpfulness votes on certain NatureWise reviews was artificially inflated and literally untrue” and that “NatureWise’s representations that it does not offered free products in exchange for reviews were literally untrue” under Lanham law. Further, the court noted that Vitamins Online had demonstrated that manipulated reviews were important to customers, who relied on them when they make purchasing decisions.
After finding that NatureWise’s conduct violated the Lanham Act, the court turned its attention to remedies. The court ordered NatureWise to return $9.5 million of its profits from the two-year period in which NatureWise and Vitamins Online were the only competitors in their segment. (The case also involved allegations that NatureWise made false claims about its ingredients, which could have affected the remedy, but that’s beyond the scope of this article.)
Readers of this blog already know that they should not manipulate criticism or engage in the other types of problematic behavior alleged in the complaint, so we will not highlight those lessons. Instead, we’re focusing on this case because it brings good news to companies that believe their competitors are engaging in these types of problematic behaviors. This decision will set a good precedent for companies wishing to consider a claim under the Lanham Act.