The Federal Trade Commission (FTC) has fined Fashion Nova, a California fast-fashion retailer, $4.2 million to settle allegations that it blocked negative product reviews from being posted on its website. The agency says this is its first case to challenge the practice of suppressing negative customer reviews.
The FTC said in a complaint (pdf) that between 2015 and 2019, Fashion Nova used a third-party tool that allowed it to automatically post four- and five-star customer reviews but withheld “hundreds of thousands [of] lower starred, more negative reviews,” which was misleading to customers. “Suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating,” according to an FTC press release.
“Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce,” Samuel Levine, director of the FTC’s bureau of consumer protection, said in a statement. In addition, the FTC has sent letters to 10 companies that offer review management services reminding them that avoiding the collection or publication of negative reviews violates the FTC Act. “Fashion Nova is being held accountable for these practices, and other firms should take note,” Levine said.
Fashion Nova disputes the FTC’s findings, however. Company spokesperson Terry Fahn said in a statement emailed to The Verge that the “allegations against Fashion Nova are inaccurate and deceptive.” The company never suppressed any website reviews, Fahn said, adding that Fashion Nova “immediately and voluntarily addressed the website review issues when it became aware of them in 2019. Fashion Nova is 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.”
Fahn said the company had relied on third-party software to “autopublish” star ratings and had “inadvertently failed” to publish reviews that the software had held for manual review and release, “given certain resource constraints during a period of rapid growth.” The issue was remedied several years ago, Fahn said, adding that all previously unpublished reviews were now posted as long as they didn’t contain threats or profanity and were otherwise appropriate.
Under the terms of the proposed settlement, Fashion Nova will pay the $4.2 million fine “for harm consumers incurred” and will be barred “from making misrepresentations about any customer reviews or other endorsements.” The company will also be required to post all customer reviews of products it currently sells, except for reviews with explicit, racist, or unlawful content and reviews unrelated to the product or to customer services. As part of the agreement, Fashion Nova “neither admits nor denies any allegations” in the FTC complaint.
The FTC said it has issued new guidance for online retailers and review platforms for collecting and publishing customers’ reviews in ways that don’t mislead other customers.