Last year, we wrote about an NAD case involving trampoline marketing. The Trampoline Safety website featured reviews designed to help buyers purchase a trampoline. But unless website visitors looked closely at a disclosure at the bottom of the site, they probably wouldn’t have realized that trampolines that had received the highest ratings were made by the same company doing the ratings. The NAD thought this was a problem because most visitors would assume that the site was independent, when it really wasn’t.
Yesterday, the FTC announced a settlement in another case involving trampolines. In this case, a company sold trampolines on a website that included logos from seemingly-independent entities. A click on one of those logos led to ratings sites that were — you guessed it — run by same the company selling the trampolines. Moreover, one of the company’s owners posted positive reviews of his company’s products and negative reviews of competing products on various sites, without disclosing his identify.
The problem here should be obvious, and the terms of the settlement are designed to ensure that the company does not mislead consumers into thinking that reviews are independent, impartial, or come from a third-party expert when they really come from the company or its employees. In many cases, that means the company will have to a include a clear and conspicuous disclosure explaining the relationship between any reviewer and the company.
Because most companies will never engage in the type of conduct alleged by the FTC, it may be tempting to dismiss this case as irrelevant. But keep in mind that some of the key principles underlying this case frequently present themselves in more mundane situations. Plenty of reputable companies have been investigated for allegedly failing to clearly disclose the connections or incentives behind reviews.