According to the Federal Trade Commission, online fashion retailer Fashion Nova will be compelled to pay $4.2 million to settle charges that it banned critical reviews of its products from being placed on its website.
In a complaint filed Tuesday, the Federal Trade Commission said that the California-based retailer misrepresented product reviews on its website as representing the views of all consumers who submitted evaluations, when in fact, it suppressed thoughts with scores of less than four stars out of five.
Fashion Nova never authorised or uploaded the hundreds of thousands of lower-starred, more critical reviews from late 2015 to November 2019.
According to the F.T.C., this is the agency’s first complaint involving a corporation to conceal poor customer ratings.
Company’s statement on this matter
In a statement, Samuel Levine, head of the F.T.C.’s Bureau of Consumer Protection, stated, “Deceptive review techniques defraud consumers, undercut honest firms, and contaminate online commerce.” “Fashion Nova is being held accountable for its actions, and other companies should pay attention.”
The F.T.C. also announced that it is writing to ten companies that provide “review management services.” It claims that the action reminds that failing to collect or publish unfavourable evaluations violates the F.T.C. Act.
The agency’s charges against the corporation were labelled “inaccurate and dishonest” by Fashion Nova. It claimed it never censored any online reviews and that when it became aware of the flaws in 2019, it remedied them immediately and voluntarily.
“Fashion Nova is certain that it would have prevailed in court and only opted to settle to avoid the distraction and legal expenditures that litigation would have brought,” the company said in an emailed statement to The Associated Press.
Review issues on e-commerce sites
While e-commerce has exploded, notably during the epidemic, the online review ecosystem is still in its infancy. In recent years, the F.T.C. has attempted to prosecute companies like Sunday Riley for publishing fake reviews online, but this is the first time the agency has challenged “review suppression.”
The F.T.C.’s actions usually serve as a warning to other businesses. On Tuesday, the agency announced that it had sent letters to ten companies that provide review management services, informing them that they would be unable to avoid gathering and publishing unfavourable reviews.
The company created the problem by Fashion Nova’s reliance on a vendor and a complexity regarding an “auto-publish” feature for specific star ratings.
Individually moderated and manually released reviews that were not auto-published might be done. “At one point in time, due to resource constraints during a period of tremendous expansion, the company mistakenly failed to complete this process,” Mr Fahn stated.
Fashion Nova is also prohibited from falsifying customer evaluations or other endorsements, in addition to the fine.
In a statement, Samuel Levine, head of the Federal Trade Commission’s Bureau of Consumer Protection, stated, “Deceptive review techniques defraud consumers, undercut honest firms, and contaminate online commerce.”
Published By – Vanshu Mehra
Edited By – Kritika Kashyap
