Astroturfing: New York cracks down on fake internet reviews

Astroturfing it is the practice of hiring internet reviewers to post fake positive reviews of your business on the internet using different usernames and IP addresses.

This practice has become increasingly prevalent because positive internet reviews are capable of increasing a company’s revenues by upwards of 10%.

Where expert reviews once drove revenue, purchaser behavior is increasingly driven by the experiences of fellow consumers (or people we think are fellow consumers).  Taken in the aggregate, consumer reviews can be much more predictive than, say, the review of one expert.  For example, I find reviews on www.redbox.com to be remarkably accurate.  As a result, I tend to rent those highly-rated movies and I also continue to use Redbox.  Without these reviews I might spend my money on different movies or different rental channels.  That’s the power that consumer reviews have.

To leverage this power, some companies have begun hiring professional online reviewers to post positive reviews under fake names using different IP addresses to avoid getting detected by filters that companies like Yelp use to weed out fake reviews.  One Craigslist ad solicited people to post reviews on Yelp, Google Maps, and CitySearch, “without getting flagged.”  These fake posters may be offshore in the Phillippines, Bangladesh, or Eastern Europe, or they may be employees of an SEO (search engine optimization) company right here in the US.

Whereas SEO companies once relied on building a better website, increasing the use of key terms, and generally trying to second-guess the search-engine algorithms to increase visitor traffic, increasingly such companies have begun offering “reputation management” as an add-on service.  The client-business benefits from having positive online reviews that increases revenue, the SEO benefits by earning extra income from the business, and the fake poster benefits by earning  $1 to $10 per post.  It’s no wonder that the practice is expanding.

The problem, however, is that fake posts dilute credibility and mislead consumers. 

Ok, so maybe the damages aren’t that bad, right?  You go for that tandori you read is so awesome and it turns out to be dry and flavorless.  Definitely a let-down, but should that be actionable?  Well here’s a bigger problem.  Fake reviews can provide a major revenue boost to companies, and arguably, that is money consumers might be spending at other competing businesses.  So the damage occurs not only by misleading consumers, but also by giving an unfair advantage to businesses who are willing to violate the law.

Although increasingly commonplace, astroturfing in fact constitutes a false and deceptive business practice under many states’ laws.  Recently, New York’s Attorney General, Eric Schneiderman announced an agreement reached with 19 companies to stop their astroturfing practices.  Several offenders were assessed penalties ranging from $2,500 to just under $100,000.  The legal basis for Schneiderman’s initiative is New York Executive Law § 63(12) and New York General Business Law §§ 349 and 350.  Under these laws, astroturfing is considered a fraudulent business practice and  false advertising punishable by injunction and fine.

Here in Georgia, the Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-372, prohibits a business from representing that goods or services have sponsorship that they do not have.

The bottom line?  It might seem that everyone is doing it, but the question may be, for how long?  Most states have laws similar to those in New York and Georgia prohibiting false and deceptive business practices.  So you need to ask yourself… just because everyone else is doing it, should I?  If you have questions about competition and your growing business, contact the business attorneys at Briskin, Cross & Sanford.

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