By Steve Thorpe
Legal News
The New York Attorney General’s office recently levied $350,000 in penalties against 19 companies for “astroturfing” and other phony endorsements.
Dubbed “Operation Clean Turf,” the probe into the reputation management industry found that companies had flooded the web with fake consumer reviews on sites including Google, Yelp and CitySearch.
The AG’s office found that many companies, including some in the Search Engine Optimization (SEO) business, used techniques to conceal identities, such as fake profiles, and that they paid commenters from around the world from $1 to $10 per review.
Attorney Kathy Ossian founded Ossian Law PC in Ferndale as a law firm exclusively focused on Information Technology Law. Practicing law for nearly 30 years, Ossian has 16 years of experience and expertise in IT Law.
Formerly senior principal and chair of the Information Technology and Cyberlaw Section at Miller Canfield, she also served as a law clerk to U.S. District Judge Robert E. DeMascio.
Ossian recently spoke with Steve Thorpe of the Legal News.
Thorpe: Another new word. It’s getting hard to keep up. Can you give us a loose definition of “astroturfing?”
Ossian: Astroturfing (derived from the word “grassroots”) is the practice of generating fake customer reviews on sites like Yelp, Angie’s List and others that consumers may rely on before purchasing goods and services. Companies engaging in astroturfing may hire a third party vendor or directly solicit and pay individuals to post the reviews.
Thorpe: New York Attorney General Eric Schneiderman said in his press release “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution.” How bad is the problem?
Ossian: The New York investigation has been described as only reaching the tip of the iceberg. In a report issued last year, IT research firm Gartner, Inc. predicted that, by 2014, between ten and fifteen percent of online reviews would be fake and paid for by the companies.
Thorpe: The AG also said “Astroturfing is false and deceptive, and it violates, inter alia, New York Executive Law § 63(12), and New York General Business Law §§ 349 and 350.” Does Michigan have similar laws?
Ossian: Yes, Section 3(c) of the Michigan Consumer Protection Act prohibits businesses from “representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have . . .” Additionally, astroturfing violates the federal FTC Act, which empowers the Federal Trade Commission to prevent “unfair or deceptive acts or practices in or affecting commerce.”
Back in 2009, the FTC issued a guidance that a blogger reviewing a product or service must disclose whether he or she received free products or services as well as any personal association with the business being reviewed. Earlier this year, the FTC clarified that, in order for such a disclosure to be “clear and conspicuous” to consumers, it must be located at the top of the page, rather than at the bottom or buried in a link.
Thorpe: Search engine optimization (“SEO”) companies routinely offer online “reputation management” as part of their services. How often is that a come on for unethical or illegal practices?
Ossian: Just as in other industries, some companies engaged in online reputation management are more reputable than others.
A business looking to hire such a company should exercise due diligence to determine whether the company’s focus includes not only marketing, public relations, technology but also considers the legal aspects of any proposed online reputation clean-up plan.
Thorpe: The investigators also said that “SEO companies were using advanced IP spoofing techniques to hide their identities.” What are those?
Ossian: IP spoofing involves changing the source information in the header of an IP address to make it appear that the post originated from a different IP address than that of the poster.
Because there are some legitimate uses of IP spoofing (such as testing), there are a number of software products available. In addition, companies engaging in astroturfing try to work around filters and other means of detection that review sites like Yelp have in place.
Thorpe: Multiple studies conclude that online reviews can make or break companies. Going forward, how hard will it be to police this activity?
Ossian: State regulators and the FTC have limited resources and can’t go after every business that is engaging in astroturfing. The NY AG’s recent investigation served to shed light on the problem.
Hopefully, raising awareness with both businesses and consumers will help discourage the practice going forward. Consumers should also realize that a review that appears too good to be true may be false.
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