As part of the deal with the FTC, Reverb agreed to pull all of the reviews it posted to stack its clients App Store ratings, and also agreed to include proper disclosure in its client promotional efforts, according to the New York Times. The company isn’t, however, being hit with any fines or penalties.
“It became apparent that we would never agree on the facts of the situation,” said company executive Tracie Snitker. “Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion.”
Reverb Communications never admitted to any wrongdoing in the investigation, either.
The Reverb investigation has the distinction of being the first case where the FTC enforced new Internet regulations that require full disclosure for product endorsements. When the new rules were introduced last year, there was confusion over who would be required to comply with the changes.
“This case sort of shows that what [FTC regulators] have in mind is not the individual blogger or Twitterer, but rather a professional endorser,” said Harvard Law School Professor Jonathan Zittrain.
For its part, the FTC is hoping the Reverb case will help show other companies gaming product ratings with fake reviews won’t fly. Stacey Ferguson, an FTC advertising practices division attorney, commented “We hope that this case will show advertisers that they have to be transparent in their practices and help guide other ad agencies.”