The Federal Trade Commission recently announced that a public relations agency has settled charges that it engaged in deceptive advertising by having its employees write positive iTunes reviews of its clients’ iPhone apps without disclosing that the reviews were written by the agency’s paid employees.
According to the New York Times, Reverb Communications—which provides public relations and marketing services for video game developers—allegedly hired interns to write “influential game reviews” for its clients from November 2008 through May 2009.
The consent order requires Reverb to remove the employee-posted reviews of its clients’ products from iTunes and to refrain from misrepresenting “the status of any user or endorser of a product or service, including, but not limited to, misrepresenting that the user or endorser is an independent user or ordinary consumer of the product or service.” Reverb, however, will not be penalized monetarily.
In October 2009, the FTC issued comprehensive “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (16 CFR Part 255) that, among other things, target endorsements by reviewers of products and services who fail to disclose financial compensation or other consideration received directly or indirectly from the seller of the product or service in question. The charges against Reverb are the first to be brought under these Guides. More information about the Guides can be found at the FTC’s website.