The FTC Says Fashion Nova Suppressed Negative Online Reviews. Now It’s Putting Other Companies on Notice

In January, the Federal Trade Commission (FTC) settled a complaint against Fashion Nova alleging that the fashion retailer blocked negative reviews from appearing on its website. Now FTC lawyer Amber Lee says she hopes the case sends a message to any other companies that may be tempted to engage in similar conduct.

Lee served as lead attorney on the historic case, which marked the first time the FTC has challenged a company for allegedly failing to post negative reviews.

“There always has to be a first case,” Lee tells TIME of how the complaint against the fast fashion giant came about. “And this is the first time we’ve uncovered evidence of this sort of review suppression.”

While the agency has previously sued companies like Sunday Riley Modern Skincare, a brand that sells skin cream and treatments at Sephora, for allegedly deceiving customers with fake reviews, Lee says that review suppression is a different story.

“Review suppression is more withholding or hiding certain categories of reviews—in this case, negative reviews or lower-starred reviews—whereas fake reviews are when either employees or some other party are paid to leave a review for a product when they haven’t had that experience with the product,” she says.

In its complaint, the FTC claimed that Fashion Nova used a third-party product review system that automatically posted four- and five-star reviews to its site but held lower-starred reviews for the company’s approval. From late 2015 until November 2019, Fashion Nova never approved or posted hundreds of thousands of lower-starred reviews, the complaint said. Fashion Nova will be required to pay $4.2 million to settle the allegations and is barred from misrepresenting customer reviews or other endorsements.

In a statement emailed to TIME, a Fashion Nova spokesperson contended that the FTC allegations were “inaccurate and deceptive” and that the company was “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.”

The spokesperson went on to say that the issue was caused by Fashion Nova’s reliance on a third-party platform that 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,” the spokesperson said. “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.”

Employing unfair or deceptive practices that violate the FTC Act in the manner alleged in this case can harm consumers who have come to look at reviews as a source of honest feedback from their peers, says Lee.

“When consumers see a review section on a website, they assume that all reviews are posted,” she says. “So when a company withholds negative reviews or does something to hide those negative reviews, it deprives consumers of the opinions of other purchasers.”

It also creates an unfairness issue for the online commerce market as a whole if “some companies are being honest and transparent about their reviews and others are doing things to hide or withhold negative reviews,” Lee says.

Although she couldn’t comment on how the FTC became aware of this particular case, Lee says the agency generally has a number of ways of discovering information that can lead to an investigation.

“[Investigations] can start from our own monitoring of the marketplace or from something that we see or hear in the news,” she says. “They can also start from referrals we receive from self-regulatory organizations or complaints from consumers, consumer advocacy groups or competitors.”

In a January press release, the FTC also announced that it had sent letters to 10 companies that offer review management services warning them about avoiding the collection or publication of negative reviews. Lee said she couldn’t comment on whether that action has progressed in any way, but urged consumers to make a report to the FTC if they notice something about a company that seems fishy.

“That’s how we find out about a lot of this stuff,” she said. “We encourage consumers to report deceptive conduct that they see.”