Online clothing retailer Fashion Nova has agreed to pay $4.2 million to settle allegations that it failed to post unfavorable reviews on its website, the Federal Trade Commission said Tuesday.
If finalized, the agreement will resolve allegations that between 2015 and 2019, Fashion Nova posted four- and five-star reviews to its website, but filtered out “hundreds of thousands” of lower-starred reviews.
Fashion Nova allegedly did so automatically, via an interface provided by a third party review management platform.
The FTC has previously prosecuted companies for allegedly attempting to prevent consumers from writing bad reviews, but the case against Fashion Nova marks the first time the agency has prosecuted a company for allegedly screening out negative reviews.
The proposed settlement with Fashion Nova also calls for the company to post all customer reviews of current merchandise, provided that they don't contain “unlawful, profane, obscene, vulgar, or sexually explicit content, or content that is inappropriate with respect to race, gender, sexuality, or ethnicity.”
A Fashion Nova spokesperson called the FTC's allegations “inaccurate and deceptive,” adding that the company "never suppressed" website reviews. The spokesperson also said the issues with the reviews stemmed from the company's use of an outside vendor.
“The issue in this case was caused by Fashion Nova’s reliance on a reputable third-party enterprise software vendor, which 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 stated.
"At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth," the spokesperson added, referring to Fashion Nova.
He also said Fashion Nova addressed the “website review issues” when it learned of them in 2019, and that all product reviews have now been posted (provided they don't contain profanity or threatening language and comply with other reasonable terms).
“Fashion Nova is 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 stated.
The FTC said Tuesday it also sent letters to 10 review management platforms, telling them to “terminate any services that allow for or result in consumer deception” -- including the ability to treat positive and negative reviews differently.
“One of our concerns is when companies take improper steps to avoid collecting or publishing negative reviews,” those letters state. “Examples may include asking for reviews only from those likely to leave positive ones, preventing or discouraging submission of negative reviews, subjecting negative reviews to greater scrutiny, refusing to publish negative reviews, or otherwise not treating positive and negative reviews equally.”
News of the Fashion Nova settlement comes around 13 months after the FTC warned that retailers might violate consumer-protection laws by removing negative posts. Specifically, the agency flagged that issue in a December 2020 letter to Yotpo -- which offers a platform that enables online retailers to manage reviews by customers.
The agency wrote that it had investigated whether Yotpo's platform -- which includes a star-rating and sentiment filters -- gave retailers “the means and instrumentalities to easily and deceptively suppress negative product reviews on their websites and mislead consumers that the reviews displayed accurately reflected the views of all purchasers who submitted reviews.”
The FTC closed its investigation of Yotpo without bringing an enforcement action against the company.