The US Federal Trade Commission is getting heavy with companies paying for fake reviews on social media.
The FTC is suing at least two hotel brands after a 2009 ruling that deemed paying for bogus reviews false advertising.
It is predicted that companies’ spending on paid-for positive reviews and social media ratings will increase, making up 10% to 15% of all reviews by 2014.
Gartner Inc vice president Ed Thompson said companies hoping to improve their brand’s reputation on social media by paying for it would have to weigh up the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics.
“Companies, including public relations firms involved in online marketing, need to abide by long-held principles of truth in advertising,” Mary Engle, director of the FTC’s Division of Advertising Practices, said. “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.”
