FTC Concerned About Bogus Online Reviews

The New York Times, Friday, January 27, 2012 12:12 PM
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Taking its cue from federal regulators, The New York Times investigates the murky world of online reviews. Already, regulators have cracked down on a few firms for what NYT terms “deceitful hyping,” while it suspects that these are far from isolated instances.

“Advertising disguised as editorial is an old problem, but it’s now presenting itself in different ways,” Mary K. Engle, the Federal Trade Commission’s associate director for advertising practices, tells NYT. “We’re very concerned.” Taking a different tact, researchers like Bing Liu, a computer science professor at the University of Illinois at Chicago, are “trying to devise mathematical models to systematically unmask the bogus endorsements,” NYT reports. “More people are depending on reviews for what to buy and where to go, so the incentives for faking are getting bigger,” Liu tells NYT. “It’s a very cheap way of marketing.”

Under F.T.C. rules, when there is a connection between a merchant and someone promoting its product that affects the endorsement’s credibility, it must be fully disclosed. Yet, as NYT discovers, that isn’t curbing online merchants from discounting products in exchange for sterling reviews.

 

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