May 29

Fake Customer Reviews and Internet Law

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Professor Eric Goldman has an excellent post about Internet fake customer reviews: What Are Appropriate Compensatory Damages for 3 Fake Competitor Reviews? The Surprising Answer–Fireworks Restoration v. Hosto.

Nominal actual damages were awarded but $150,000 in punitive damages were slapped against the guy writing negative fake customer reviews against his former business partner.

As I’ve explained to my Internet law clients, there are plenty of ways to compete fairly online without resorting to “black hat” marketing tactics that end up costing your business far more than you’ll ever make by using them.

Given the importance of online customer reviews to many companies, both Internet-based and brick-and-mortar establishments, this issue will continue to wind its way through the courts because the temptation to post fake negative reviews is simply too great for some to pass up. You see it all the time in reviews on Google, Amazon, etc. Someone with an axe to grind decides to smear the reputation of a company by posting a false customer review.

No one says you have to promote your competitor’s business online. But it’s good practice to treat your competitor’s reputation the same way you’d like your competitor to treat yours when engaging in Internet marketing strategies and tactics.