We frequently get questions about whether companies can be held liable for claims that appear in consumer reviews. Although it’s clear that there are instances in which a company can be held liable if it has a connection to the person who wrote the review, it has been less clear to what extent a company can be held liable for content in independent reviews. A new NAD decision sheds some light on where the line might be drawn.
APEC makes water filtration systems that it previously advertised as being “Made in the USA.” After an FTC inquiry, the company removed those claims from its ads, updated claims that appeared on third-party platforms, and made efforts to correct claims that were made by third-party marketers. That didn’t stop consumers from echoing the previous “Made in USA” claims in reviews, though. One of APEC’s competitors argued that APEC continues to benefit from those inaccurate reviews, and that the company should be required to take steps to correct them. This is especially true, the competitor argued, because APEC routinely responds to negative reviews from consumers.
NAD started by noting that an advertiser cannot make claims through consumer reviews that the advertiser can’t substantiate itself. Moreover, if an advertiser learns about inaccurate claims in third-party ads, the advertiser is responsible for taking steps to ensure that those claims are corrected. In this case, NAD determined that that responsibility did not extend to the challenged consumer reviews, though. Where do you draw the line?
According to NAD, the “critical question” is “whether the advertiser exercises control over the messages conveyed through customer reviews.” Although the lines can get blurry, “NAD determined that APEC did not exercise sufficient control over the messages conveyed by the product reviews at issue and that it is not responsible for the truthfulness of reviews . . . .” Notably, APEC did not respond to these reviews. The company’s “silence and decision to refrain from responding to reviews does not convey a message that the domestic origin claims are accurate.” And the company’s practice of responding to some reviews did not give rise to an obligation to correct unsupported claims in other reviews.
Although NAD did not hold APEC responsible for the consumer reviews that had been flagged by its competitor, “it cautioned APEC against interacting with any such reviews in any manner which may seem to validate an unsupported domestic origin claim.” This suggests that companies should exercise caution when responding, liking, or otherwise interacting with reviews that include claims that a company can’t support. A favorable interaction could be read as validation for those claims.