FTC Fines Business $4.2 Million for Review Gating

Posted By Madilyn Moeller, Tuesday, February 8, 2022

One star review

By Medical Justice, Reposted with Permission.

In 2019, Medical Justice alerted members to avoid the practice of "review gating."

What's that, you reasonably ask?

Review-gating is the process of filtering candidates before asking them to leave you a review. Normally this is done by sending many or all customers an email or text message template and first asking them if they had a positive or negative experience. If they had a positive experience, they are asked to leave a review on a review site, such as Google. But, if they had a negative experience, they are prompted to leave private feedback and are never sent the option to leave a review publicly. Negative reviews are buried.

Business owners have loved this feature because they are terrified of negative reviews and naturally prefer the opportunity to have only five-star reviews. Of course.

In April 2018, Google clarified its guidelines stating that review gating is not permitted.

"Don't discourage or prohibit negative reviews or selectively solicit positive reviews from customers."

In 2019, we also believed that use of review gating by doctors could create issues with a board of medicine or dentistry. The practice of medicine and dentistry are heavily regulated by these boards. Marketing and advertising are allowed, as long as the messages are not false or deceptive. Trapping negative responses from patients to keep their reviews from posting on third-party review sites—tilting the table in favor of positive reviews—arguably looks like false or deceptive marketing. A patient relying on third-party sites, with no knowledge of filtering, will reasonably conclude a practice delivers stellar performance when, in fact, that may not be the case. That could lead to an allegation of unprofessional behavior, putting one's license at risk.

There are scores of review-capturing processes that enable review gating. They tout review gating as a desirable feature. Such platforms are often ignorant of how regulated the health care space is.

Now, the Federal Trade Commission (FTC) has spoken.

The FTC announced that online fast-fashion retailer Fashion Nova had agreed to pay a $4.2 million fine for selectively not publishing negative product reviews. Fashion Nova also agreed it will no longer suppress customer reviews.

The FTC complaint alleged that Fashion Nova had "misrepresented that the product reviews on its website reflected the views of all purchasers who submitted reviews, when in fact it suppressed reviews with ratings lower than four stars out of five. The case is the FTC's first involving a company's efforts to conceal negative customer reviews."

The agency also notified 10 review platforms that can no longer "avoid collection or publication of negative reviews." (By the way, the list of these platforms was identified by a request filed under Freedom of Information Act.]

It is the first case focused solely on reviews with such a significant fine, and it puts the world on notice that the FTC is finally putting a stake in the ground around abusive review practices. The vote was unanimous and non-partisan (4 – 0) in favor of issuing the complaint and accepting the consent agreement with Fashion Nova.

As Near Media reported, review gating is unethical and now clearly illegal.

The good news is that practices that deliver excellent service and great results need not worry excessively about an occasional negative review. An occasional negative review, amid a sea of positive reviews, makes the positive reviews look authentic and real. The public understands you cannot make everyone happy. The public is more interested in how you solve problems, rather than being perfect. You get points for solving problems.

The FTC is sending a warning shot across the bow. Expect anyone with an axe to grind to think about notifying the FTC. This list includes disgruntled patients whose voices are silenced, unhappy ex-employees, jilted ex-spouses/lovers, and, yes, competitors. Most practices cannot handle a $4.2 million fine, much less the negative publicity surrounding such action.

Finally, don't be surprised if state attorneys general pick up the slack if the FTC limits its own responses. From the New York attorney general's website:

Carmel is a well-known car service based in New York City. The investigation into Carmel found that between May 5, 2016 and July 27, 2016, the company sent 161,000 email messages to Carmel customers requesting feedback regarding their recent ride with Carmel. Customers were asked to evaluate Carmel services by clicking "Perfect" or "Good," listed with an opportunity for ten dollars ($10) discount off the next ride, or "Bad," which did not offer any discount. Upon clicking the "Perfect" and "Good" links, the customer was directed to a consumer-review website such as Yelp.com and provided a $10 discount off their next ride upon confirmation of the review. If a customer clicked on the "Bad" button, he or she was directed to a web portal at Carmel with the opportunity to leave feedback. However, in this case, they were not directed or otherwise told to post the review on a consumer-review website and were not offered a discount or any other form of compensation.

Negative reviews were buried and never saw the light of day. In 2016, Carmel paid $75k fine as per its agreement with the NY Attorney General.

What Are the Tea Leaves Saying?

A fine in 2016 for review gating plus "paying" for positive reviews was $75,000. A fine in 2022 solely for review gating was $4.2 million.

If you are using a platform that gates reviews, now is the time to get your house in order. Medical Justice built its review capture system with compliance in mind. Schedule a free consultation to identify whether your system may be non-compliant.

Medical Justice provides free consultations to doctors facing medico-legal obstacles. It has solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. We also provide counsel specific to COVID-19. If you are navigating a medico-legal obstacle, visit Medical Justice's booking page to schedule a free consultation.

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