![]() ![]() Principle 1 – Be transparent about commercial relationships: the ACCC advises that businesses be open and transparent about any commercial relationships between the reviewed business, review platform and/or reviewer, which may have an impact on its consumer reviews.In the Guide, the ACCC sets out three guiding principles for businesses: In 2013, the ACCC had recognized that online reviews were becoming increasingly relied upon by consumers to make informed purchasing decisions and published the “ Online reviews – a guide for business and review platforms” (the “ Guide”). More recently, online tasking platform Service Seeking Pty Ltd was ordered by the Federal Court to pay A$600,000 in penalties for falsely representing that reviews published on its platform were by consumers, when in fact the reviews had been created by the business themselves. For example, in 2011, removalist business Citymove Pty Ltd was ordered to pay a A$6,600 infringement notice for representing reviews on its website as genuine consumer reviews when they were not. ![]() In Australia, the Australian Competition and Consumer Commission (“ ACCC”) also acknowledges the importance of online reviews to consumers when making purchasing decisions and has taken action against many businesses for publishing false or misleading online reviews and testimonials. The FTC has also announced that it would be putting 10 other companies on notice regarding their review management practices. Despite the US$4.2 million settlement sum, Fashion Nova has denied these allegations and claims that the FTC’s allegations are “inaccurate and deceptive”. In doing so, Fashion Nova had deprived consumers of useful information that may impact their purchase and artificially inflated the average star rating of its products. The FTC alleges that from as early as 2015 to as late as 2019, Fashion Nova had not approved hundreds of thousands of lower-starred, unfavourable reviews from being published on its website. According to the FTC, Fashion Nova had used a third-party online product review management software which would automatically post reviews consisting of four or five stars to its website but withheld any customer reviews that were less than four stars for the company’s approval. In January 2022, the FTC filed a complaint against Fashion Nova alleging that the California-based retailer had been withholding negative customer reviews from being published on its website. ![]() This case serves as a cautionary tale to all businesses that allow customer reviews of its good or services on its online platforms, and businesses should take note here, even those here in Australia. While this is not the first time the FTC has brought a claim against Fashion Nova, it is the first time that the FTC has investigated a business for suppressing and failing to publish negative reviews. Along with releasing hundreds of new designs on its website ( each week, the brand has also been endorsed by many social media influencers and even collaborated with the international pop stars, Cardi B and Megan Thee Stallion.Įarlier this year, it was reported that Fashion Nova had come to a US$4.2 million settlement with the Federal Trade Commission (“ FTC”) after the US fast fashion giant was accused by the FTC of engaging in deceptive reviews practices. Founded in 2006, Fashion Nova took advantage of the growing popularity of the ‘Kardashian aesthetic’ and quickly became a viral sensation on social media. Any avid social media user in the younger demographic would have heard of fast fashion brand Fashion Nova at some point in time. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |