Fake reviews raise serious legal issues. They might be false, deceptive, malicious or fabricated. Many are even laudatory. Some businesses even go so far as to pay other people or businesses to write five-star reviews that are posted on their customers’ websites.
Fake Five-Star Reviews:
If a business owner is able to prove damages from a false and malicious review, he or she can seek compensation in a court of law under a state’s libel laws. There’s nothing libelous or slanderous about a laudatory fake review though. The only person who might be damaged would be the business owner who failed to experience an uptick in business after paying somebody to fabricate one or more fake reviews. Regardless of the fact that the law has probably been broken, it’s highly unlikely that the business owner is going to get their money back, and to file a lawsuit for the loss of that money due to ineffective fake reviews would be laughable. Chalk that loss up to poor business judgment and avarice. In fact, if there’s a victim of a successful fake five-star review campaign, it’s probably a competitor.
Federal Trade Commission (FTC) Endorsement Guides:
Truth in advertising is nothing new. It’s been around since long before the internet, but before buying a product or service, you’ll want to know if a person or business has been paid or compensated for promoting it. FTC Endorsement Guides operate to memorialize the fundamental truth in advertising precept that product or service endorsements must be factually based and not misleading. On top of that, if there is some type of a connection between the endorser and the product or service being endorsed that isn’t expected by a consumer, and that consumer’s evaluation of the endorsement might be affected by the connection, it must be disclosed. For example, if a reviewer gives five-stars to a resort, and he or she spent a weekend there with all expenses having been paid by the resort, that fact must be disclosed.
FTC Enforcement:
The FTC guides are not regulations or statutes. They can’t be enforced, but if an advertiser departs from or ignores the guides, the matter can be referred for investigation. If the FTC believes that consumers have been defrauded by false, misleading or deceptive advertising, it can bring an action in one of the federal district courts. It can then seek temporary and permanent injunctive relief to have a fraudster cease and desist from scamming, freeze their assets and obtain compensation for victims.
The Lanham Act:
Dating back to 1941, the Lanham Act is even older than both television or the internet. Although primarily intended as trademark legislation, it also addresses claims of false or misleading advertising in interstate commerce. The statute is found at 41 USC section 1125(a)(1). As opposed to the FTC, consumers have no standing in Lanham Act lawsuits, but competitors do. Competitors don’t need to wait for a year or more for an administrative agency’s investigation, analysis and decision on whether action can be brought against another competitor who was involved in false and misleading advertising either. They can go to the nearest federal courthouse and file their lawsuit. Should the plaintiff competitor prevail, an injunction can issue restraining the defendant from false, misleading or deceptive advertising, money damages and in some cases, costs and attorney’s fees.
Proving a Lanham Act Violation:
Aside from the interstate commerce requirement, other proof of a violation is required. Those include the following:
- A false, misleading or deceptive statement of purported fact.
- It must be for a commercial purpose like an advertisement or endorsement.
- It either deceives people or it is likely to be deceptive.
- The statement has caused or is likely to cause a competitive disadvantage or monetary damages to the plaintiff.
Google on Spam and Fake Content:
Google’s policy on spam and fake content doesn’t appear to be well thought out, but it doesn’t have to be. Google is protected by 47 USC section 230, et seq., which is the Communications Decency Act (CDA). Subsection (c)(1) of the act states as follows: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” On that basis, Google’s policy on spam and fake content consists of the two sentences that follow: “Your content should reflect your genuine experience at the location and should not be posted just to manipulate a place’s ratings. Don’t post fake content, don’t post the same content multiple times, and don’t post content for the same place from multiple accounts.” Since Google can’t be treated as the publisher or speaker of information contained in spam or fake reviews, it can’t be sued for libel in the United States. It’s immune from false deceptive or malicious reviews so long as it remains within the confines of the protection that the legislature gave it.
The Sole Existing Exception:
The U.S. Tenth Circuit Court of Appeals did find that a certain website operator acted as both an interactive computer service and a provider of information content. The fact that it developed content showed that it was acting as something more than a neutral conduit. The court reasoned that if a service provider encourages the development of what is offensive in certain content, it can’t hide behind the protection of the CDA. In that case, the provider solicited and paid for false information. In another case, the Sixth Circuit Court of Appeals later ruled that a refusal to remove unlawful content wasn’t a material contribution to the content’s offensiveness.
The FTC Guides are a start, but given it’s resources, it can’t possibly keep up with the thousands of fake reviews that are being posted every day in the United States. The Lanham Act provides relief on a competitor vs. competitor basis, and it doesn’t appear as if the Communications Decency Act will be amended in the foreseeable future.
Right now, Google is bulletproof.
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Great article, Chris.
According to a recent survey, 86% of people read reviews for local businesses. Unfortunately, I have seen a few personal injury law firms and other attorneys and lawyers obtaining blatantly fake reviews to bury their bad reviews when they have a bad reputation. I have spoken to reps at Google My Business about this and the inflated numbers which display in Google Maps, and unfortunately, they’re unwilling to do anything about it in most cases. I have seen several people leaving these lawyers bad reviews after their injury cases were screwed up, leaving people with lifelong injuries and no compensation. I have been wondering in my head if companies like Yelp and Google could be held accountable, or even sued. You have answered my question in great detail. Thanks! Len