The FTC Says Fashion Nova Suppressed Negative Online Reviews. Now It’s Putting Other Companies on Notice
The Federal Trade Commission (FTC), settled in January a case against Fashion Nova. Fashion Nova claimed that Fashion Nova had blocked negative reviews from being posted on its site. Amber Lee from the FTC says this is a warning to all other companies who may want to follow in her footsteps.
Lee was the lead lawyer in the case. This historic case marked the first time that the FTC had challenged an organization for failing to publish negative reviews.
“There always has to be a first case,” Lee tells TIME of how the complaint against the fast fashion giant came about. “And this is the first time we’ve uncovered evidence of this sort of review suppression.”
Lee claims that the suppression of reviews is different than what happened in previous lawsuits against companies such as Sunday Riley Modern Skincare. This brand sells skincare products at Sephora.
“Review suppression is more withholding or hiding certain categories of reviews—in this case, negative reviews or lower-starred reviews—whereas fake reviews are when either employees or some other party are paid to leave a review for a product when they haven’t had that experience with the product,” she says.
In its complaint, the FTC claimed that Fashion Nova used a third-party product review system that automatically posted four- and five-star reviews to its site but held lower-starred reviews for the company’s approval. The complaint stated that Fashion Nova did not approve or post hundreds of thousands lower-starred reviews between November 2015 and 2019. Fashion Nova will have to pay $4.2 million in settlement and cannot misrepresent customer reviews or any endorsements.
In a statement emailed to TIME, a Fashion Nova spokesperson contended that the FTC allegations were “inaccurate and deceptive” and that the company was “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.”
The spokesperson went on to say that the issue was caused by Fashion Nova’s reliance on a third-party platform that 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,” the spokesperson said. “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.”
Lee asserts that consumers can be hurt if they use deceptive or unfair practices to violate the FTC Act, as is the case in this instance.
“When consumers see a review section on a website, they assume that all reviews are posted,” she says. “So when a company withholds negative reviews or does something to hide those negative reviews, it deprives consumers of the opinions of other purchasers.”
It also creates an unfairness issue for the online commerce market as a whole if “some companies are being honest and transparent about their reviews and others are doing things to hide or withhold negative reviews,” Lee says.
Although she couldn’t comment on how the FTC became aware of this particular case, Lee says the agency generally has a number of ways of discovering information that can lead to an investigation.
“[Investigations] can start from our own monitoring of the marketplace or from something that we see or hear in the news,” she says. “They can also start from referrals we receive from self-regulatory organizations or complaints from consumers, consumer advocacy groups or competitors.”
The FTC announced in a press release that 10 review management companies had received letters from it warning them not to publish or collect negative reviews. Lee said she couldn’t comment on whether that action has progressed in any way, but urged consumers to make a report to the FTC if they notice something about a company that seems fishy.
“That’s how we find out about a lot of this stuff,” she said. “We encourage consumers to report deceptive conduct that they see.”