A PR agency will settle FTC charges that the agency's reviews about its clients' apps on the iTunes store were deceptive advertising. The FTC complaint alleged that the reviews were couched as "independent reviews reflecting the views of ordinary consumers." According to the FTC: the PR agency was not independent, but instead was paid to promote the apps and, in some instances, paid a percentage of sales; and the PR agency's posts did not contain any disclosure about the connection between the agency and its clients.
Mary Engle (Director of the FTC’s Division of Advertising Practices) is quoted in the FTC's press release - "Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising. 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.”
The proposed settlement does not require any monetary payment from the PR Agency, but it does:
1) prohibit the agency from misrepresenting the status of any endorser, including misrepresenting that the endorser is independent or an ordinary consumer;
2) require the agency to disclose, clearly and prominently, a material connection, when one exists, between it and its clients; and
3) within 7 days of the settlement, remove any product review or endorsement viewable to the public that does not comply with 1 and 2 above.
The FTC's announcement of the settlement can be found here.
The FTC's Complaint and Proposed Settlement can be found here.