Pressing its case against weight loss marketer Roca Labs, the Federal Trade Commission argues in new court papers that the company's attempts to stifle bad online reviews harmed consumers.
The FTC says that the Sarasota, Florida-based marketer's prior practice of stifling bad reviews was likely to leave people with an overly favorable impression of the company's merchandise.
"Prospective customers searching for information on Roca Labs or similar products would not necessarily know that previous purchasers had negative experiences, let alone their complete nature," the FTC writes.
Citing evidence provided by Temple University professor Paul Pavlou, the agency adds that Roca Labs' prior practice of squelching bad reviews increases consumers' "willingness to buy" its products.
The agency's papers, filed Monday, come in response to Roca Labs' request that U.S. District Court Judge Mary Scriven in Tampa dismiss allegations that its use of non-disparagement clauses amounted to an unfair business practice.
The battle dates to September 2015, when the FTC sued Roca Labs. Among other charges, the FTC challenged the company's clauses forbidding bad reviews.
Roca Labs, which touts its weight-loss products as more effective than gastric bypass surgery, allegedly said in a prior version of its sales terms (sent in package inserts and also available online) that any negative Web reviews would be considered defamatory. The company also told consumers that they would be subject to $100,000 in damages for posting reviews, according to the FTC.
Roca Labs followed up on its threats by suing at least four customers, according to the FTC.
The company argued in recent court papers that the FTC's complaint marked an attempt to apply the Consumer Review Fairness Act retroactively. That law, passed last year, outlaws non-disparagement clauses in form contracts.
But the FTC counters that Roca Labs' terms of service were illegal even before Congress passed the Consumer Review Fairness Act. "The enactment of a statute expressly dealing with specific conduct does not compel the conclusion that a prior statute did not already prohibit the conduct," the FTC writes.