In January, we posted that Fashion Nova had agreed to settle an FTC complaint alleging that the company’s practice of suppressing negative reviews on its site “deprives consumers of potentially useful information and artificially inflates the product’s average star rating” in violation of Section 5 of the FTC Act. According the FTC’s complaint, the company would automatically post four- and five-star reviews, but failed to post any review with a lower rating for about four years.
This week, a plaintiff filed a class action against Fashion Nova based on the same facts. The plaintiff starts with statistics about reviews, noting one study suggesting that 93% of adults in the US read reviews before making a purchase online and another study suggesting many consumers will not even consider a product unless it has a minimum average rating of 3.4 stars. She alleges that because of this, Fashion Nova artificially inflated ratings to make products appear more appealing.
By hiding negative reviews, the plaintiff argues that Fashion Nova omitted important information – such as comments about product sizing, fit, or quality – that consumers frequently rely upon when deciding whether or not to purchase a product. She also argues making the products appear more popular than they actually were allowed the retailer to charge prices that are higher than it would have otherwise been able to charge if consumers had all of the facts.
This lawsuit doesn’t raise any new facts or alter any of the guidance we mentioned in our last post. It does, however, serve as a fresh reminder that regulators, competitors, and plaintiffs’ attorneys are carefully scrutinizing how companies generate and publish reviews.