Commentary

FTC Says Yahoo Won't Face Astroturfing Charges

Yahoo has dodged a bullet at the Federal Trade Commission, which said this month that it has closed an astroturfing investigation into the company without filing charges.

“Upon review of this matter, we have determined not to recommend enforcement action at this time,” Mary Engle, FTC associate director for advertising practices said in a Sept. 3 letter to Yahoo's counsel.

The investigation stemmed from allegations that Yahoo employees posted positive reviews of the company's mobile apps, without disclosing that they worked for Yahoo.

Engle says in her letter that the FTC requires endorsers to reveal any “material connection” between themselves and marketers. She added that even though Yahoo's social media policy required employees to disclose their status when reviewing the company's products, the FTC was “concerned that employees were not adequately informed of the policy.”

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Engle says the FTC isn't bringing a case for several reasons, including that the apps involved were free. She also says it appears that “a very small number” of Yahoo employees were involved, and that Yahoo didn't encourage its workers to post the reviews.

She adds: “Yahoo has committed to improve its social media policy and to more actively inform its employees of the policy.”

Engle's letter mentioned press accounts of the allegations, but she didn't offer details about where the reports appeared or which apps were involved.

But Buzzfeed reported in January that Yahoo employees appeared to be giving rave reviews to a new Yahoo News Digest app. And in May of 2012, TheNextWeb reported that Yahoo employees seemed to be shilling for the company's search and browsing tool Axis.

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