The U.S. Federal Trade Commission has approved a final consent order in its first-ever enforcement action over a case involving “review hijacking,” or when a marketer steals consumer reviews of another product to boost the sales of its own. In this case, the FTC has ordered supplements retailer The Bountiful Company, the maker of Nature’s Bounty vitamins and other brands, to pay $600,000 for deceiving customers on Amazon where it used a feature to merge the reviews of different products to make some appear to have better ratings and reviews than they otherwise would have had if marketed under their own listings.
The case exposes how sellers have been exploiting an Amazon feature that allows sellers to request the creation of “variation” relationships between different products and SKUs. The feature is meant to help marketers and consumers alike as it creates a single detail page on Amazon.com that shows similar products that are different only in narrow, specific ways, the FTC explains — like items that come in a different color, size, quantity or flavor. For instance, a t-shirt may have a dozen SKUs associated with one another because the shirt comes in a wide variety of colors. For shoppers, it’s helpful to see all the options on one page so you can pick the item that best matches your needs and budget. In the case of supplements, the feature could be used to combine the same products by merging various SKUs featuring different quantities of the item in question, like bottles with 50, 100 or 200 pills, for example.
However, The Bountiful Company exploited Amazon’s feature to merge its newer products with older, well-established products which had different formulations, the FTC said.
In one example, the retailer asked Amazon to merge newer supplements like Nature’s Bounty Stress Comfort Mood Booster and Nature’s Bounty Stress Comfort Peace of Mind Stress Relief Gummies with three other products: Nature’s Bounty Anxiety & Stress Relief Ashwagandha KSM-66 tablets, Nature’s Bounty Botanical Sleep tablets and Nature’s Bounty Valerian Root capsules.
Not only did the older products have different formulations from the newer ones, but they also had different formulations from one another. In an internal company from August 2020, the company even stated that the approximately 1,000 ratings and 4.5-star average ratings the newer products had were because of this variation relationship. Before the merge, Stress Comfort had only 26 reviews and 3.2 stars. In the email, an e-commerce director at Bountiful noted that consumers “unfortunately” hadn’t loved the Stress Comfort products, but their sales had “spiked the second we variated the pages” and then continued to grow.
The company also merged newer Zinc Gummies with established products like Nature’s Bounty Calcium Magnesium & Zinc caplets and Nature’s Bounty Zinc 50 mg caplets — again, products with different formulations. It then repeated this process with vitamins and supplements across a number of categories, from brain focus tablets to elderberry softgels to vitamins and gummies and more. Brands involved included Nature’s Bounty and Sundown Kids.
The FTC cited and screenshotted more than a dozen examples from 2020 and 2021 in its original complaint against the vitamin and supplement maker, which in 2021 sold its core brands — including Nature’s Bounty and Sundown — to Nestlé.
As a result of these product merges, consumers who happened across any of the newer products would believe them to be better received than they were in reality, as they were benefiting from the merged ratings and reviews of other, differentiated items.
“Boosting your products by hijacking another product’s ratings or reviews is a relatively new tactic, but is still plain old false advertising,” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said this February when the consent order was first announced ahead of its public comment period and finalized version.
With today’s decision, Bountiful will have to pay the Commission $600,000 as monetary relief for consumers. It’s also prohibited from making similar types of misrepresentations and barred from using “deceptive review tactics that distort what consumers think about its products or services,” the FTC said in a unanimous 4-0 decision.
Amazon itself has been fighting the fake review industry in a number of ways, including through lawsuits and permanently banning brands for review fraud. But with The Bountiful Company, Amazon actually provided the feature that allowed the retailer to commit fraud — and it seemingly didn’t police its use. Given that Amazon has now entered the healthcare market with its own online pharmacy and its new telehealth service, its inattention to health-related fraud around hijacked vitamin and supplement reviews is even more concerning.
In response to a request for comment, an Amazon spokesperson shared the following:
“There’s no place for fraud in Amazon’s store. We have proactive measures in place to prevent listing abuse and we continuously monitor our store. Our policies prohibit reviews abuse including offering incentives like gift cards to write positive reviews. We suspend, ban, and take legal action against those who violate these policies and remove inauthentic reviews,” they said. “Amazon receives millions of reviews every week globally, which are analyzed before publication by our skilled investigators and sophisticated industry-leading tools. More than 99% of products viewed by customers in our stores contain only authentic reviews. Amazon will continue to assist enforcement agencies in holding bad actors accountable, including the FTC.”
Updated, 4/10/23, 3:57 pm ET with comment.
Source @TechCrunch
