Public relations agency Reverb Communications will settle U.S. Federal Trade Commission charges that its employees engaged in false advertising by posing as consumers and writing game reviews on behalf of its clients on Apple's iTunes store.
The terms of the settlement require Reverb Communications and owner Tracie Snitker to remove any reviews and comments left that portray the employees as regular consumers. It also forbids the PR agency from endorsing a product in any way unless they clearly identify that they are a PR firm.
Reverb and Snitker posted these game reviews between November 2008 and May 2009, using account names that gave readers the impression the reviews were written by disinterested consumers.
These comments would have been relevant to consumers who were considering a purchase of the games, according to the FTC complaint.
The PR agency did not make clear that it was hired to promote the games it left these reviews on, and that they often received a percentage of the sales.
“Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising,” says Mary Engle of the FTC's Division of Advertising Practices.
“Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers.”
The FTC stated in last year's revised endorsements and testimonials guides that online posts of any nature must disclose the connection between reviews or comments left and the seller of the service or product in question. This rule goes for employees associated with a product as well as any agency advertising the product.
The announcement for this settlement will be published in the Federal Register shortly and will be subject to public comment for 30 days, from today through the 24th of September. After this period, the FTC will decide whether the ruling will be final. Consumers can comment on the settlement here
In a statement received by consumer weblog Kotaku
, Reverb PR director Casey Lynch says of the settlement, "During discussions with the FTC, it became apparent that we would never agree on the facts of the situation. Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion because as the FTC states: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation."]