In a first, FTC extracts millions of dollars from online store accused of blocking bad reviews on its website
Glad rags merchandiser denies wrongdoing, says it coughed up $4.2m to 'avoid distraction'
Internet garment slinger Fashion Nova will cough up $4.2m to shut down accusations that it censored negative reviews left by customers on its website.
The flash clobber biz allegedly used third-party software to screen product reviews before they appeared on its site. Product ratings of four and five stars were automatically published on the e-tailer's website, while lower-starred, negative reviews were withheld, according to the US Federal Trade Commission [PDF]. Hundreds of thousands of bad reviews were concealed between 2015 and 2019, it was claimed.
As part of its settlement with the FTC, Fashion Nova will cough up millions of dollars, and must allow all customer reviews to be posted online unless they contain obscene or unlawful content. It's the first time the American watchdog has extracted dosh from a company for suppressing online negative product reviews.
"Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said in a statement this week. "Fashion Nova is being held accountable for these practices, and other firms should take note."
The agency said it has also sent letters [PDF] to ten companies selling product review software to warn them that helping businesses conceal negative reviews violates Section 5 of the FTC Act, which states that "unfair or deceptive acts or practices in or affecting commerce…are…declared unlawful."
Pay to make it go away
Fashion Nova denied hiding any product reviews in a statement to The Register.
"The FTC's allegations against Fashion Nova are inaccurate and deceptive. Fashion Nova never suppressed any website reviews, and it immediately and voluntarily addressed the website review issues when it became aware of them in 2019," a company spokesperson told us.
"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."
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The biz has, instead, blamed the problems raised in the complaint on the web software it used and on human error: "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."
"At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth. That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening language and comply with other reasonable terms."
It's not the first time Fashion Nova has found itself in trouble with the FTC. Last year, it agreed to pay $9.3m to settle claims it failed to give customers the chance to request refunds after the biz shipped orders later than expected. Instead of providing full refunds, the company would offer gift cards, it was alleged. ®