FTC Settles Complaint Against PR Firm for Using Fake Testimonials

The U.S. Federal Trade Commission has settled a complaint it made against a public relations firm Reverb Communications which accused them of using employees to pose as ordinary customers and post reviews of video games on Apple’s iTunes store. The PR company from Twain Harte, California, worked with several video game developers, and employees of the firm allegedly posted several positive reviews of their clients’ video games on the iTunes store between November 2008 and May 2009, said the FTC complaint, filed earlier this year.

Reverb was accused of deceptive advertising by using iTunes account names that gave readers the impression the reviews had been written by disinterested consumers. Reverb employees and owner Tracie Snitker failed to disclose that they were payed to promote the games in question or that they often received a percentage of the sales, all of these facts being relevant to the consumers reading the reviews.

The FTC complaint did not disclose the video games Reverb employees reviewed on iTunes, yet they gave examples of the tone and language Reverb employees used in their comments, such as “amazing new game,” “one of the best” and “one of the best apps just got better.”

This is the first astroturfing (online public relations or advertising campaigns passed as grassroots support for a product or services) case the FTC has settled, said Stacey Ferguson, a staff attorney in the FTC’s Bureau of Consumer Protection. Although it has been heavily used in the past few years, astroturfing can be a violation of the FTC Act, Ferguson added, which states such techniques represent a deceptive practice of people with material connections to products or services to promote them without disclosing their interests.

Reverb agreed to the settlement after “it became apparent that we would never agree on the facts of the situation,” Tracie Snitker said:

“Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion because as the FTC states: ‘The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.”

The settlement requires that Reverb and Snitker remove any previously posted endorsements that misrepresent the authors as independent users or ordinary consumers and that fail to disclose a connection between them and the seller of a product or service. It also bars Reverb and Snitker from engaging in such promotion techniques without proper disclosure in the future.