Gartner: FTC to crack down on fake reviews

By 2014, between 10 percent and 15 percent of social media reviews will be fakes paid for by companies, according to analysts with Gartner Inc., a technology trends forecasting company based in Stamford.

Gartner predicted the U.S. Federal Trade Commission (FTC) will crack down on the practice in the coming years. In 2009, the FTC stated that paying for positive reviews without disclosing that the reviewer had been compensated equates to deceptive advertising; the following year, it reached its first settlement addressing the practice, against a public relations company that paid for positive reviews for a video-game designer client.

“Marketing, customer service and IT social media managers looking to use reviews, fans and ‘likes’ to improve their brand’s reputation on social media must beware of the potential negative consequences on corporate reputation and profitability,” said Gartner analyst Ed Thompson, in a written statement. “(Companies) will need to weigh the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics.”

Gartner said as the FTC begins to crack down on the practice of fake reviews and ratings, some companies are taking a different approach ”“ instead of posting new, fake, favorable reviews, they are identifying fake and defaming reviews and requesting the reviewers or host site remove them or face legal repercussions. Gartner analysts said they expect a similar market of companies to emerge specializing in reputation defense versus reputation creation.

Gartner plans to address multiple social media topics at its upcoming Gartner Symposium/ITxpo in Orlando, Fla., scheduled for Oct. 21-25.