Notice2024-26711
Sitejabber; Analysis of Proposed Consent Order To Aid Public Comment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 18, 2024
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair or deceptive acts or practices. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order--embodied in the consent agreement--that would settle these allegations.
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 222 (Monday, November 18, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 222 (Monday, November 18, 2024)]
[Notices]
[Pages 90691-90694]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26711]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 232 3060]
Sitejabber; Analysis of Proposed Consent Order To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the complaint and the
terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before December 18, 2024.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write ``Sitejabber;
File No. 232 3060'' on your comment and file your comment online at
<a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the instructions on the web-
based form. If you prefer to file your comment on paper, please mail
your comment to the following address: Federal Trade Commission, Office
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex
J), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Joyce Dela Pe[ntilde]a (202-326-2722),
Attorney, Division of Advertising Practices, Bureau of Consumer
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec. 2.34, 16 CFR
2.34, notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis to Aid Public Comment describes the terms of the consent
agreement and the allegations in the complaint. An electronic copy of
the full text of the consent agreement package can be obtained at
<a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before December 18,
2024. Write ``Sitejabber; File No. 232 3060'' on your comment. Your
comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Because of heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website. If you prefer to file your comment on paper, write
``Sitejabber; File No. 232 3060'' on your comment and on the envelope,
and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail
Stop H-144 (Annex J), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule Sec. 4.9(c). In
particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule Sec. 4.9(c). Your
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted on the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website--as legally required by FTC Rule Sec. 4.9(b)--we cannot redact
or remove your comment from that website, unless you submit a
confidentiality request that meets the requirements for such treatment
under FTC Rule Sec. 4.9(c), and the General Counsel grants that
request.
Visit the FTC website at <a href="https://www.ftc.gov">https://www.ftc.gov</a> to read this document
and the news release describing the proposed settlement. The FTC Act
and other laws the Commission administers permit the collection of
public comments to consider and use in this proceeding, as appropriate.
The Commission will consider all timely and responsive public comments
it receives on or before December 18, 2024. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a consent order from GGL
Projects, Inc., which does business as Sitejabber (``Sitejabber''). The
proposed consent order (``proposed order'') has been placed on the
public record for thirty days for receipt of comments by interested
persons. Comments received
[[Page 90692]]
during this period will become part of the public record. After thirty
days, the Commission will again review the agreement and the comments
received and will decide whether it should withdraw from the agreement
and take appropriate action or make final the agreement's proposed
order.
This matter involves consumer reviews and ratings of businesses and
products that Sitejabber collected on behalf of its clients'
businesses. It collected these ratings and reviews from consumers at
the time of purchase, before consumers had an opportunity to actually
experience the product or service purchased. According to the FTC,
Sitejabber used these point-of-purchase results to inflate the ratings
and review counts of its clients on the <a href="http://Sitejabber.com">Sitejabber.com</a> review platform
and in Google and other search results. The complaint explains that
Sitejabber also provided its clients with product review widgets that
allowed them to publish, on their own websites, product-specific
ratings and reviews that Sitejabber collected.
The complaint alleges that Sitejabber violated section 5(a) of the
FTC Act by misrepresenting that point-of-sale ratings and reviews
reflected the experiences of consumers who had actually received and
had the opportunity to experience the product or services purchased.
The complaint further alleges that Sitejabber provided its business
clients with the means and instrumentalities to deceive consumers that
product reviews and ratings collected at the time of purchase and
displayed on the clients' websites were from consumers who had received
and had the opportunity to experience the product being reviewed.
The proposed order contains provisions designed to prevent
Sitejabber from engaging in these and similar acts and practices in the
future. Provision I prohibits Sitejabber from misrepresenting or
assisting others in misrepresenting that the average customer rating or
total number of ratings or reviews of a product, service, or business
reflects the views of customers who had received the product or service
purchased and had the opportunity to experience it, or that any rating
or review collected at the time or point of purchase was collected from
a customer who received the product or service purchased or had the
opportunity to experience the product or service purchased. The
provision also prohibits misrepresentations about any ratings, average
ratings, or reviews that Sitejabber collects, moderates, or displays.
Provision II prohibits Sitejabber from providing others with the means
or instrumentalities to misrepresent that product or service ratings or
reviews collected at the point of purchase were collected from
customers who had the opportunity to experience the product or service
purchased.
Provisions III through VII of the proposed order contain reporting
and compliance provisions. Provision III mandates that Sitejabber
acknowledge receipt of the order, distribute the order to principals,
officers, and certain employees and agents, and obtain signed
acknowledgments from them. Provision IV requires Sitejabber to submit
compliance reports to the Commission one year after the order's
issuance and submit notifications when certain events occur. Under
Provision V, Sitejabber must create certain records for ten years and
retain them for five years. Provision VI provides for the FTC's
continued compliance monitoring of Sitejabber's activity during the
order's effective dates. Finally, Provision VII provides the effective
dates of the order, including that, with exceptions, the order will
terminate in 20 years.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the complaint or proposed order, or to modify in any
way the proposed order's terms.
By direction of the Commission.
April J. Tabor,
Secretary.
Concurring Statement of Commissioner Melissa Holyoak
I support today's settlement with Sitejabber, an online review
platform that collected customer ratings and reviews about shopping
experiences and products through surveys displayed on the checkout
screen. The crux of the Complaint is that Sitejabber allegedly (1)
misrepresented that customer ratings and reviews displayed on its
website and in internet search results were from consumers who had the
opportunity to experience the products or services purchased, and (2)
provided its clients using the embeddable web widget with the ``means
and instrumentalities'' to misrepresent that the displayed customer
reviews and ratings were from customers who had actually purchased or
experienced the product or service. I write in brief to note our proper
use of the ``means and instrumentalities'' doctrine here, a form of
primary liability appropriate where the defendant itself engages in
deception.\1\
---------------------------------------------------------------------------
\1\ See, e.g., In re Shell Oil Co., 128 F.T.C. 749, 764 (1999)
(majority statement) (``It is well settled law that the originator
is liable if it passes on a false or misleading representation with
knowledge or reason to expect that consumers may possibly be
deceived as a result.'') (citing Regina Corp. v. FTC, 322 F.2d 765
768 (3d Cir. 1963) (affirming liability under means and
instrumentalities theory where defendant distributed its own
misrepresentative price lists that were used, in turn, to deceive
consumers)); id. at 766 (Commissioner Swindle, dissenting) (``Means
and instrumentalities is a form of primary liability, and a
respondent is primarily liable only for its own misrepresentations
to consumers.'').
---------------------------------------------------------------------------
The Complaint alleges that Sitejabber's embeddable web widget,
which displayed Instant Feedback Product Reviews (``IFPRs''), was, as
designed, an inherently deceptive tool. While Sitejabber collected real
feedback about customers' shopping choices at the point-of-sale,\2\
Sitejabber's widget displayed it on customer-facing websites as
``star'' ratings of products themselves. According to the Complaint,
Sitejabber built a mismatch into IFPRs, limiting real customer reviews
to one aspect (shopping choices), while displaying those reviews about
an entirely different aspect (the product itself).\3\ Importantly,
there is no suggestion that Sitejabber's clients had the ability to
control or customize the output from the embeddable web widget. Thus,
Sitejabber allegedly designed, distributed, and deployed IFPRs for its
clients, in short, to mislead consumers about what product ratings
signified.
---------------------------------------------------------------------------
\2\ Compl. ] 22.
\3\ Id. ]] 23-25.
---------------------------------------------------------------------------
Unlike the Commission's Complaint against review writing platform
Rytr,\4\ this Complaint properly alleges that Sitejabber provided the
``means and instrumentalities'' to deceive consumers. Whereas Rytr
provided a neutral review-writing tool that may have been used
deceptively in some instances,\5\ we allege here that the only function
of Sitejabber's embeddable web widget, as designed, was to enable its
clients to display a deceptive description of its instant ratings and
reviews on their own websites.
---------------------------------------------------------------------------
\4\ Dissenting Statement of Comm'r Melissa Holyoak, Joined by
Comm'r Andrew N. Ferguson, In re Rytr, LLC, FTC Matter No. 2323052
(Sept. 25, 2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-rytr-statement.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-rytr-statement.pdf</a>.
\5\ See generally id.; see also Dissenting Statement of Comm'r
Andrew N. Ferguson, Joined by Comm'r Melissa Holyoak, In re Rytr
LLC, Matter No. 232 3052 (Sept. 25, 2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-rytr-statement.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-rytr-statement.pdf</a>.
---------------------------------------------------------------------------
Of course, there is nothing inherently deceptive about the
collection, use, and display of consumer reviews, where the output
accurately reflects the input. Indeed, such products could be highly
valuable to both consumers and the market, enabling businesses to tout
real customer reviews about their products
[[Page 90693]]
or services and facilitating more informed consumer decisions about
their shopping experience or the product itself. But design choices
matter when developing these types of products. And Sitejabber's design
choice here conflated real customer feedback about shopping choices
with an actual rating for a product, harming its clients and consumers.
Concurring Statement of Commissioner Andrew N. Ferguson
Today, the Commission issues an administrative complaint and
accepts a proposed consent agreement with Sitejabber.\1\ Sitejabber
provided its clients, e-commerce stores, with the ability to collect
instant shopping-experience and product reviews from customers on order
confirmation screens--immediately after placing an order but before the
customer could have received or used the products. For posting these
reviews and average ratings on its clients' profile pages on
<a href="http://Sitejabber.com">Sitejabber.com</a>, and misrepresenting that the reviews were from
customers who had actually received and used the products, the
complaint accuses Sitejabber of deceiving consumers in violation of
section 5 of the FTC Act.\2\ For giving its clients the ability to
embed those same product ratings on their own websites, the complaint
accuses Sitejabber of a further section 5 violation for furnishing its
clients with the means and instrumentalities to deceive consumers. I
concur in both counts.
---------------------------------------------------------------------------
\1\ In re GGL Projects, Inc., a corporation, also d/b/a
Sitejabber, Complaint & Decision and Order.
\2\ 15 U.S.C. 45(a).
---------------------------------------------------------------------------
This case presents some of the same issues presented in the
Commission's recent action against the artificial-intelligence platform
Rytr, from which I dissented.\3\ The Commission raises the same means-
and-instrumentalities theory of section 5 liability that it deployed
against Rytr for offering an AI-powered consumer review generator.
Sitejabber's alleged business practices, however, are very different
from Rytr's. Although someone could have used Rytr's tool to deceive
consumers, the tool also had substantial lawful uses. Sitejabber's
instant product reviews and the widgets by which its clients displayed
them on their own websites, however, served no purpose other than to
deceive consumers. Indeed, it appears that Sitejabber's very purpose in
offering the widgets was to assist its clients in deceiving consumers.
---------------------------------------------------------------------------
\3\ Dissenting Statement of Commissioner Andrew N. Ferguson,
Joined by Commissioner Melissa Holyoak, In the Matter of Rytr LLC,
Matter No. 2323052 (Sept. 25, 2024) (``Ferguson Rytr Dissent'').
---------------------------------------------------------------------------
Sitejabber collected two types of reviews from consumers. Instant
Feedback Surveys (IFSs) asked customers to comment on their shopping
experience immediately after concluding a purchase, and to rate that
experience on a scale of one-to-five stars. Instant Feedback Product
Reviews (IFPRs) also took the form of a written response and a one-to-
five-star rating, but asked customers why they chose the product they
had just purchased. Sitejabber would collect these reviews from the
consumer on the retailer's web page. Prompts to collect the reviews
would pop up on the retailer web page almost immediately after the
consumer had finalized a purchase.
[GRAPHIC] [TIFF OMITTED] TN18NO24.003
Sitejabber maintained a public profile page on <a href="http://Sitejabber.com">Sitejabber.com</a> for
each of its retail clients showing their average rating and individual
reviews, including IFS-derived ratings and reviews. Additionally, on a
``Products'' tab on that same page, Sitejabber listed the products sold
by that client alongside the average IFPR ratings for each.\4\
Consumers browsing these profile pages would reasonably believe that
all these reviews and ratings were from customers who had received and
had a chance to use the products sold by the retailers. The Commission
alleges that Sitejabber did not adequately disclose that these reviews
and ratings were obtained at the point of sale, before the customers
could have received, let alone used, the purchased products. For
misrepresenting IFSs and IFPRs as
[[Page 90694]]
authentic reviews from customers who had received and had a chance to
use the products, the complaint charges Sitejabber with deceptive
conduct in violation of section 5.
---------------------------------------------------------------------------
\4\ For some of Sitejabber's clients, the ratings would also
incorporate reviews from consumers who had a chance to receive and
use the products. Such reviews are not inherently deceptive, and
nothing in the Commission's proposed consent order would prohibit
Sitejabber from displaying those reviews, and the average ratings
derived from them, on its own site or through widgets. See Decision
& Order at 5-6 (prohibiting Sitejabber from misrepresenting that
reviews collected at the point of sale were from customers who had
an opportunity to receive and use the product, from misrepresenting
that ratings were derived only from reviews left by customers who
had such an opportunity, and from providing the means and
instrumentalities to make such misrepresentations). But comingling
such reviews with reviews collected at the point-of-sale, before the
consumer could have received and used the product, renders the
entire star rating deceptive. See United States v. Phillip Morris
USA Inc., 566 F.3d 1095, 1128 (D.C. Cir. 2009) (``[E]ven partially
true statements can be actionable fraud if intentionally misleading
as to facts.'').
---------------------------------------------------------------------------
Sitejabber is also accused of having provided its retail clients
with widgets by which the retailers could embed the IFPR-derived
product ratings on their own websites. These widgets had no purpose
other than to represent that those product ratings were derived from
the reviews of consumers who had received and had a chance to use the
product in question. This representation was false given that the
ratings were obtained from consumers who had not received the product
when they provided the rating. For offering this widget, the complaint
charges Sitejabber with a further section 5 violation for providing the
means and instrumentalities for the commission of deceptive acts and
practices.
Sitejabber's condemned business practices are very different from
Rytr's. Rytr provided an AI-powered writing tool which could be used to
generate draft consumer reviews.\5\ Although a consumer or business
could have used Rytr's tool to generate a false product review, and
that false product review could in some circumstances violate section
5's prohibition on deceptive acts or practices, that was not
necessarily the case.\6\ Indeed, the Commission did not supply a single
example of someone having used Rytr's tool to violate section 5.\7\ A
consumer also could have used Rytr's tool to generate an initial draft
of a perfectly honest consumer review.\8\ The mere fact that someone
could use a product to commit fraud does not make that product the
means and instrumentalities to commit fraud.\9\ In my view, the
provision of a product or service with potential unlawful uses is not
the provision of the means and instrumentalities to violate section 5
unless (1) the instrumentality in question ``has no or de minimis legal
use''; \10\ (2) the provider of the instrumentality had the purpose of
facilitating the section 5 violation; \11\ or (3) the provider ``knows,
or has reason to know, that the person to whom the product or service
was supplied will use it to violate section 5.'' \12\
---------------------------------------------------------------------------
\5\ Ferguson Rytr Dissent at 1-2.
\6\ Id. at 6-7.
\7\ Id. at 2.
\8\ Id. at 7.
\9\ Id. at 5-6.
\10\ Id. at 6.
\11\ Id. at 7-9.
\12\ Ibid.
---------------------------------------------------------------------------
Whereas Rytr's review generator tool satisfied none of those
requirements, the allegations in the complaint here show that
Sitejabber's product satisfies all three. First, there is no legitimate
purpose for a widget displaying an instant product review rating. No
reasonable consumer would be interested in a one-to-five-star product
rating derived from reviews left by other consumers who had not yet
received or used the product.\13\ When a consumer views a product
rating, he reasonably assumes that the rating is based on reviewers'
experiences with the product, not with the purchasing process. Second,
because the widgets had no use other than to deceive consumers, we can
reasonably infer that Sitejabber knew that every single one of its
clients was using them for that purpose. Finally, there is ample
evidence that Sitejabber's very purpose in offering the widgets was to
assist in the deception of consumers. The widgets were nothing but an
extension of the same deception that Sitejabber was carrying out on its
own website using the same deceptive ratings and on behalf of the same
clients.
---------------------------------------------------------------------------
\13\ FTC Policy Statement on Deception, 103 F.T.C. 174, 175
(1984), <a href="https://www.ftc.gov/legal-library/browse/ftc-policy-statement-deception">https://www.ftc.gov/legal-library/browse/ftc-policy-statement-deception</a>, appended to In Re Cliffdale Assocs., Inc., 103
F.T.C. 110 (1984) (in determining whether a practice is deceptive
``we examine the practice from the perspective of a consumer acting
reasonably'').
---------------------------------------------------------------------------
I therefore concur in the Commission's complaint and proposed
consent order against Sitejabber.
[FR Doc. 2024-26711 Filed 11-15-24; 8:45 am]
BILLING CODE 6750-01-P
</pre></body>
</html>Indexed from Federal Register on November 18, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.