Questionable marcomms tactics can lead to legal woes

The FTC is not the only source of concern for PR firms and clients regarding questionable marketing practices.

PR executives should be aware of the Federal Trade Commission guides concerning the use of endorsements and testimonials issued in December 2009. Two of my previous PRWeek columns have discussed these guides in detail. The first announced the new guidelines and spoke to how PR pros should navigate them. The second highlighted the FTC's first enforcement action since the guides were revised in 2009.

The FTC, however, is not the only source of concern for PR firms and their clients regarding questionable marketing practices. There is also a genuine prospect of civil lawsuits relating to false and deceptive blogs and reviews of products or services posted on websites.

False reviews have cropped up recently on numerous popular review websites, making it difficult to separate the honest and dishonest ones. Some marketing companies argue that false reviews do not constitute “endorsements” and are not deceptive. The websites on which these fake reviews appear, however, do not necessarily agree with that point of view. In fact, one well-known website that publishes automotive reviews recently took matters into its own hands by starting a lawsuit to remove these fake reviews from its site. 

Last month, Edmunds.com, an online automotive research publisher, sued Humankind Design Ltd., a Texas marketing agency, and its owner Justin Anderson. The lawsuit alleged that Humankind provided services through the websites www.humankind.com, www.glowingreviews.com, and www.glowingreviews.co, and that in doing so, Humankind registered more than 2,000 fraudulent accounts and misused them to submit fictitious reviews for Humankind's clients. Additionally, Edmunds.com claimed Humankind violated the Terms of Service listed on its site and also committed trademark infringement, fraud, false advertising, and unjust enrichment.

Edmunds.com, along with other websites that publish reviews, justifiably believes that fake reviews tarnish the trustworthiness of the entire site. This, it contends, will ultimately reduce its ability to generate traffic and revenues.

Perhaps the most telling part of Edmunds' complaint is a screenshot on Humankind's FAQ page from glowingreviews.co, one of Humankind's automated review websites. In an answer to the question “Does posting reviews with Glowing Reviews violate the Terms of Service of the assorted review sites?”, Glowing Reviews candidly admitted the following: “In general, the review sites state that you must be posting for yourself and not for someone else. So in these cases the answer would be 'yes.' ” However, Glowing Reviews justifies the practice by stating that it is extremely easy to violate the Terms of Service of any website – and so this practice is common.  

Remarkably, Glowing Reviews tries to explain its conduct by stating, “Every business plays in this grey area and this service just lets you do it much more efficiently.” Glowing Reviews also has a section of its website where it lists 15 companies as being “supported sites” (Edmunds.com included) and prominently displays each organization's logo. However, Glowing Reviews fails to recognize that truth and authenticity are “black” and “white” – not any shade of “grey.”

Humankind has since taken down the "glowingreviews" websites it controlled, but the company has refused comment on its reasons for doing so. 

The Edmunds.com case is an important reminder that the FTC and other regulatory agencies are not the only entities that monitor the practices of PR and other marcomms firms. Indeed, proactive litigation such as the case filed by Edmunds.com can help defer future false and deceptive practices. The case might also lead to a court decision that reaffirms the scope of impermissible practices in blogging and social media.  

The lawsuit further reminds PR pros to be more cautious about a website's Terms of Service before using it in a marketing campaign, as well as to consult with experienced legal counsel when in doubt of what is and is not permissible.

Michael Lasky is a senior partner at the law firm of Davis & Gilbert LLP, where he heads the PR practice group and co-chairs the litigation department. He can be reached at mlasky@dglaw.com. 

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