In a first, FTC extracts millions of dollars from online store accused of blocking bad reviews on its website
(2022/01/27)
- Reference: 1643243294
- News link: https://www.theregister.co.uk/2022/01/27/ftc_fashion_nova/
- Source link:
Internet garment slinger Fashion Nova will cough up $4.2m to shut down accusations that it censored negative reviews left by customers on its website.
The flash clobber biz allegedly used third-party software to screen product reviews before they appeared on its site. Product ratings of four and five stars were automatically published on the e-tailer's website, while lower-starred, negative reviews were withheld, according to the US Federal Trade Commission
As part of its settlement with the FTC, Fashion Nova will cough up millions of dollars, and must allow all customer reviews to be posted online unless they contain obscene or unlawful content. It's the first time the American watchdog has extracted dosh from a company for suppressing online negative product reviews.
[2]
"Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce," Samuel Levine, director of the FTC's Bureau of Consumer Protection, [3]said in a statement this week. "Fashion Nova is being held accountable for these practices, and other firms should take note."
[4]
[5]
The agency said it has also sent letters
Pay to make it go away
Fashion Nova denied hiding any product reviews in a statement to The Register .
"The FTC's allegations against Fashion Nova are inaccurate and deceptive. Fashion Nova never suppressed any website reviews, and it immediately and voluntarily addressed the website review issues when it became aware of them in 2019," a company spokesperson told us.
"Fashion Nova is highly confident that it would have won in court and only agreed to settle the case to avoid the distraction and legal fees that it would incur in litigation."
[8]US watchdog pokes Facebook a second time: Meta faces fresh monopoly lawsuit
[9]You better have patched those Log4j holes or we'll see what a judge has to say – FTC
[10]It's 'near-impossible to escape persistent surveillance' by American ISPs, says FTC
[11]Study says SEC 10-K not fit for purpose when it comes to Big Tech, and the companies are using that to their advantage
The biz has, instead, blamed the problems raised in the complaint on the web software it used and on human error: "The issue in this case was caused by Fashion Nova's reliance on a reputable third-party enterprise software vendor, which offered an option to 'autopublish' various star ratings in a drop-down menu. Those that were not autopublished were filtered and could be individually reviewed and manually released."
"At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth. That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening language and comply with other reasonable terms."
[12]
It's not the first time Fashion Nova has found itself in trouble with the FTC. Last year, it agreed to pay [13]$9.3m to settle claims it failed to give customers the chance to request refunds after the biz shipped orders later than expected. Instead of providing full refunds, the company would offer gift cards, it was alleged. ®
Get our [14]Tech Resources
[1] https://www.ftc.gov/system/files/documents/cases/192_3138_fashion_nova_complaint.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.ftc.gov/news-events/press-releases/2022/01/fashion-nova-will-pay-42-million-part-settlement-ftc-allegations
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.ftc.gov/system/files/attachments/press-releases/fashion-nova-will-pay-42-million-part-settlement-ftc-allegations-it-blocked-negative-reviews/generic_letter.pdf
[7] https://www.ftc.gov/about-ftc/what-we-do/enforcement-authority
[8] https://www.theregister.com/2022/01/12/ftcs_antitrust_meta/
[9] https://www.theregister.com/2022/01/05/ftc_log4j_fix/
[10] https://www.theregister.com/2021/10/22/ftc_isp_privacy/
[11] https://www.theregister.com/2021/12/14/study_sec_10k/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.ftc.gov/news-events/press-releases/2020/04/fashion-nova-will-pay-93-million-consumer-refunds-settle-ftc
[14] https://whitepapers.theregister.com/
The flash clobber biz allegedly used third-party software to screen product reviews before they appeared on its site. Product ratings of four and five stars were automatically published on the e-tailer's website, while lower-starred, negative reviews were withheld, according to the US Federal Trade Commission
[1]PDF
. Hundreds of thousands of bad reviews were concealed between 2015 and 2019, it was claimed.As part of its settlement with the FTC, Fashion Nova will cough up millions of dollars, and must allow all customer reviews to be posted online unless they contain obscene or unlawful content. It's the first time the American watchdog has extracted dosh from a company for suppressing online negative product reviews.
[2]
"Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce," Samuel Levine, director of the FTC's Bureau of Consumer Protection, [3]said in a statement this week. "Fashion Nova is being held accountable for these practices, and other firms should take note."
[4]
[5]
The agency said it has also sent letters
[6]PDF
to ten companies selling product review software to warn them that helping businesses conceal negative reviews violates Section 5 of the [7]FTC Act , which states that "unfair or deceptive acts or practices in or affecting commerce…are…declared unlawful."Pay to make it go away
Fashion Nova denied hiding any product reviews in a statement to The Register .
"The FTC's allegations against Fashion Nova are inaccurate and deceptive. Fashion Nova never suppressed any website reviews, and it immediately and voluntarily addressed the website review issues when it became aware of them in 2019," a company spokesperson told us.
"Fashion Nova is highly confident that it would have won in court and only agreed to settle the case to avoid the distraction and legal fees that it would incur in litigation."
[8]US watchdog pokes Facebook a second time: Meta faces fresh monopoly lawsuit
[9]You better have patched those Log4j holes or we'll see what a judge has to say – FTC
[10]It's 'near-impossible to escape persistent surveillance' by American ISPs, says FTC
[11]Study says SEC 10-K not fit for purpose when it comes to Big Tech, and the companies are using that to their advantage
The biz has, instead, blamed the problems raised in the complaint on the web software it used and on human error: "The issue in this case was caused by Fashion Nova's reliance on a reputable third-party enterprise software vendor, which offered an option to 'autopublish' various star ratings in a drop-down menu. Those that were not autopublished were filtered and could be individually reviewed and manually released."
"At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth. That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening language and comply with other reasonable terms."
[12]
It's not the first time Fashion Nova has found itself in trouble with the FTC. Last year, it agreed to pay [13]$9.3m to settle claims it failed to give customers the chance to request refunds after the biz shipped orders later than expected. Instead of providing full refunds, the company would offer gift cards, it was alleged. ®
Get our [14]Tech Resources
[1] https://www.ftc.gov/system/files/documents/cases/192_3138_fashion_nova_complaint.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.ftc.gov/news-events/press-releases/2022/01/fashion-nova-will-pay-42-million-part-settlement-ftc-allegations
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.ftc.gov/system/files/attachments/press-releases/fashion-nova-will-pay-42-million-part-settlement-ftc-allegations-it-blocked-negative-reviews/generic_letter.pdf
[7] https://www.ftc.gov/about-ftc/what-we-do/enforcement-authority
[8] https://www.theregister.com/2022/01/12/ftcs_antitrust_meta/
[9] https://www.theregister.com/2022/01/05/ftc_log4j_fix/
[10] https://www.theregister.com/2021/10/22/ftc_isp_privacy/
[11] https://www.theregister.com/2021/12/14/study_sec_10k/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YfIm@02a4RF-F6LxA-V4VQAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.ftc.gov/news-events/press-releases/2020/04/fashion-nova-will-pay-93-million-consumer-refunds-settle-ftc
[14] https://whitepapers.theregister.com/
Yup
Woodnag
"Fashion Nova never suppressed any website reviews, and it immediately and voluntarily addressed the website review issues when it became aware of them"
Er, which izzit?
"never suppressed"
or
"immediately and voluntarily addressed the website review issues"
???
Good, but
HildyJ
Good on the FTC for doing their job.
But for Fashion Nova, with revenues estimated at $400m-$600m, it's just a slap on the wrist, like so many corporate fines.
it's not surprising that they labeled this a 'distraction' and paid up to make it go away.
Re: Good, but
Brian 3
It's not a slap on the wrist, it's a small tax on highly profitable business practices. Just like the 'fine' for companies conspiring to keep wages down, the amount is so small that the behavior was HUGELY profitable. Why would other companies not try and do the same, there's so much money to be had! The fines need to be larger than the profit from the illegal behavior, for starters.
They admit no wrong when they do this, it shouldn't be allowed. They obviously knew this was going on the whole time, and there just never managed to be budget for getting the bad reviews up to speed, oh darn!
Re: Good, but
Snake
I'll personally say "Good job" when they do the same to Yelp.
Anonymous Coward
"... the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth."
Ask a manager: why would we spend money hiring people to process and post negative reviews? 'Inadvertent' my Aspergillus fumigatus.
so, guilty as charged then.