On May 19, 2022, the Federal Trade Commission (FTC) unanimously voted to publish for public comment in the Federal Register proposed changes to the Guides Concerning the Use of Endorsements and Testimonials in Advertising (the Guides). The proposal makes a number of changes to the Guides, which were first enacted in 1980 and later updated
New Jersey Prohibits Company from Contractually Banning Online Customer Reviews
This week, NJ Attorney General Christopher Porrino and the Division of Consumer Affairs settled with Fertility Bridges, Inc., a fertility clinic operating in California and Illinois, over the clinic’s practice of contractually barring consumers from posting online reviews of their experiences with the clinic and its personnel.
The provisions, set forth in the Terms of…
Judge Orders Yelp to Identify Anonymous Negative Commenter
This post was written by Kimberly R. Chow and John P. Feldman.
On September 15, a judge in Boston ruled that Yelp must reveal the identity of an anonymous commenter who wrote a negative review of a jeweler on the online review site.
The order to non-party Yelp in the attempted defamation suit of the…
Software Comparison Site Feels the Crunch of the UK Regulator
A UK website offering reviews of accounting software that was operated by TheAccountancyPartnership.com Ltd t/a Pandle (“Pandle”) was recently challenged by Crunch Accounting Ltd (“Crunch”) on purported misleading advertising and unfair comparisons with identifiable competitors. Crunch complained to the UK advertising regulator, the Advertising Standards Authority (the “ASA”) (see:…
Negative Reviews: Pamphleteering or Defamation?
Does the First Amendment trump the right of an aggrieved merchant who seeks to unmask the identity of the authors of scathing reviews? That’s how many framed the key issue in Yelp! Inc. v. Hadeed Carpet Cleaning, Inc., which was appealed to the Virginia Supreme Court. Did the court answer the question as to…
Incentivized Reviews Without Disclosure Get Panned by FTC
In the latest iteration of the Federal Trade Commission’s (FTC) approach to testimonials and endorsements in the context of online advertising, the Commission alleged that AmeriFreight, a company that arranges the shipment of consumers’ cars through third-party freight carriers and its owner posted customer reviews without disclosing that it had provided a financial incentive for…
NAD Jumps the Shark on Use of Consumer Reviews as Substantiation
Sniffing something fishy in the sea of consumer reviews, the National Advertising Division (NAD) snapped its jaws at advertising claims made in television commercials, infomercials, and on the Web by Euro-Pro Operating for its Shark brand vacuum cleaners. The advertising was brought to the NAD’s attention by competing vacuum cleaner manufacturer, Dyson, Inc. The claim at issue was:
“America’s Most Recommended Vacuum Brand.*
*Based on percentage of consumer recommendations for upright vacuums on major national retailer websites through August 2013, U.S. Only.”
What was special about this case was that Euro-Pro sought to substantiate its “most recommended” claim on aggregated consumer reviews.
The first issue was, what did the claim really mean? Dyson said it meant that the Shark is the most recommended vacuum among vacuum cleaner owners, nationwide, and that the claim communicated a comparative message, namely that the Shark was recommended over other brands. Euro-Pro, on the other hand, thought the claim was as clear as Caribbean water: the Shark is “America’s Most Recommended Vacuum Brand” “based on percentages of consumer reviews for upright vacuums on major national retailer websites through August 2013.” There was nothing comparative about the statement, according to the advertiser. Interestingly, the NAD tended to side with the advertiser’s interpretation, namely that the claim “America’s Most Recommended Vacuum Brand*” reasonably conveyed a message that Shark is the most recommended vacuum brand among American vacuum cleaner consumers. However, it interpreted the asterisked second part of the claim to be an explanation of how Euro-Pro sourced the data on which it based its claim. So, the Shark wins, right? Not so fast.
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