Beauty Brand Busted for Employee Product Reviews

Dec 06, 2019

picture to accompany article about legality of employee online reviewsCan employees post product reviews?

As online marketing attorneys, we hear the question a lot — but the answer isn’t simple.

Disclosures, in most circumstances, typically suffice. But what you can’t do is coach employees to write and post fake reviews.  A Beauty company, Sunday Riley, learned this lesson the hard way.

The Scandal: Sunday Riley Exposed for Fake Reviews

Sunday Riley started her eponymous beauty company, Sunday Riley, in 2009. A startup success story, within a few years, the brand grew from an idea seedling into a multi-million-dollar corporation.

But into every life — even a business’s — a little rain must fall. Sunday Riley’s downpour came courtesy of Reddit, thanks to a salty former employee took to the website and screeded:

“This is a throwaway account because Sunday Riley is majorly vindictive. I’m sharing this because I’m no longer an employee there and they are one of the most awful places to work, but especially for the people who shop us at Sephora, because a lot of the really great reviews you read are fake.

We were forced to write fake reviews for our products on an ongoing basis, which came direct from Sunday Riley herself and her Head of Sales. I saved one of those emails to share here. Also, check out the glassdoor reviews for Sunday Riley, the ones that we weren’t asked to write, anyway, which are ACCURATE AF.”

The post sparked a Sunday Riley backlash, and the Federal Trade Commission opened an unfair and deceptive marketing investigation into the company. Ultimately, the Commission uncovered Sunday Riley’s internal fake review program.

Sunday Riley’s Fake Review Program

Sunday Riley developed an intentional, company-wide online review scheme. Between 2015 and 2017, managers instructed underlings how to:

  • Set up accounts on websites like Sephora (“Create three accounts on Sephora.com, registered as different identities.”);
  • Write reviews (“[a]lways leave 5 stars”);
  • Down-vote negative reviews with the goal of removal (“If you see a negative review – DISLIKE it. After enough dislikes, it is removed. This directly translates into sales!!”
  • Pick which products to push; (“Tidal and Good Genes are 4.2 and I would like to see them at 4.8+” and “UFO and Martian are at 4.9 – let’s keep it that way!”)

The posting instructions even included marketing tips, like “Credibility is key to the review.” When Sephora caught on and deleted reviews from the company’s IP addresses, Sunday Riley invested in a VPN to hide them.

The Censure: FTC Busts Sunday Riley over Sephora Reviews

In the end, the FTC condemned Sunday Riley’s fake review initiative and signed a settlement with the brand. As a result, moving forward, Sunday Riley employees must disclose their connection to the company in any endorsements or posts. From the agreement:

“[Sunday Riley must] instruct their employees and agents about their responsibilities to clearly and conspicuously disclose their connections to the [the company’s] products in any endorsements.”

The company didn’t admit wrongdoing nor pay a fine, which prompted an internal backlash among FTC ranks.

The Dissent: Two FTC Commissioners Think Sunday Riley Needs A Harsher Punishment

Rohit Chopra and Rebecca Kelly Slaughter, two FTC commissioners, aren’t happy with Sunday Riley’s slap on the wrist and issued a dissenting opinion. The pair admonished:

“Today’s proposed settlement includes no redress, no disgorgement of ill-gotten gains, no notice to consumers, and no admission of wrongdoing. Sunday Riley and its CEO have clearly broken the law, and the Commission has ordered that they not break the law again.”

They also argued that “the proposed settlement is unlikely to deter other would-be wrongdoers” and that it “sends the wrong message to the marketplace: dishonest firms may come to conclude that posting fake reviews is a viable strategy, given the proposed outcome here.”  

The letter also urged the FTC to “seek monetary consequences for fake review fraud, even if the exact level of ill-gotten gains is difficult to measure” because “fake reviews distort our markets by rewarding bad actors and harming honest companies, [and] the problem is growing.”  

Connect with a Fake Review Lawyer

Got a fake review legal matter? Our FTC defense team has handled it all, and we’ve beaten the commission in court. Get in touch today to start exploring your options. Just because the FTC throws around unfair and deceptive marketing accusations doesn’t mean they’ll stick.

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