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Retailer Rebuked by FTC for Posting Fake Online Reviews

But two commissioners say the agency is going too easy on the firm.

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Retailers of all types want a flattering online presence, but a new Federal Trade Commission case serves as a warning: Fake reviews don’t pay.

The FTC has halted what it calls the “deceptive online marketing tactics” of a company that allegedly used fake product reviews posted by its employees on a well-known retail website.

Cosmetics firm Sunday Riley Modern Skincare LLC and its CEO, Sunday Riley, have agreed to settle an FTC complaint, according to a press release from the agency. They were alleged to have posted fake reviews to Sephora.

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“Dishonesty in the online marketplace harms shoppers, as well as firms that play fair and square,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “… It undermines the marketplace, and the FTC will not tolerate it.”

Wired.com noted, however that the settlement “did not require the company to admit fault, notify customers of the fraud, or turn over any ill-gotten gains.”

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As such, Commissioner Rohit Chopra, who along with Commissioner Rebecca Slaughter dissented from the FTC decision, stated: “Dishonest firms may come to conclude that posting fake reviews is a viable strategy, given the proposed outcome here. Honest firms, who are the biggest victims of this fraud, may be wondering if they are losing out by following the law. Consumers may come to lack confidence that reviews are truthful.”

As detailed in the FTC’s complaint, Texas-based Sunday Riley Skincare sells a variety of cosmetic products, including Luna Sleeping Night Oil, Good Genes All-In-One Lactic Acid Treatment, Blue Moon Tranquility Cleansing Balm, Start Over Active Eye Gel Cream, Bionic Anti-Aging Cream and C.E.O. Rapid Flash Brightening Serum. The company sells its cosmetics at Sephora, a multinational chain of personal care and beauty stores, and on the Sephora.com website. The products sell for between $22 and $158 each, according to the FTC.

Sephora allows consumers to leave customer reviews of products sold on its website, providing a forum for sharing authentic feedback about the products it sells, the FTC explained. In its complaint, the agency alleged that between November 2015 and August 2017, Sunday Riley Skincare managers, including Riley herself, posted reviews of their branded products on the Sephora site using fake accounts created to hide their identity, and requested that other Sunday Riley Skincare employees do the same thing.

The FTC alleged that after Sephora removed fake employee-written reviews, Sunday Riley Skincare employees suspected this was because Sephora recognized the reviews as coming from their IP addresses. Sunday Riley Skincare then allegedly obtained, according to one of the company’s managers, “an Express VPN account [to] … allow us to hide our IP address and location when we write reviews.” A VPN (virtual private network) lets users access the internet privately using separate servers to hide their online activity.

The FTC complaint also quoted from a July 2016 email that Riley wrote to her staff directing each of them to “create three accounts on Sephora.com, registered as … different identities.” The email included step-by-step instructions for setting up new personas and using a VPN to hide their identities, and directed employees to focus on certain products, to “[a]lways leave 5 stars” when reviewing Sunday Riley Skincare products, and to “dislike” negative reviews. “If you see a negative review – DISLIKE it,” Riley wrote, adding: “After enough dislikes, it is removed. This directly translates into sales!!”

The FTC’s complaint charged Sunday Riley Skincare and the CEO with two violations of the FTC Act: 1.) making false or misleading claims that the fake reviews reflected the opinions of ordinary users of the products; and 2.) deceptively failing to disclose that the reviews were written by Riley or her employees.

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The proposed administrative order settling the FTC’s allegations against Sunday Riley Skincare and Riley is intended to ensure the respondents do not engage in similar allegedly illegal conduct in the future, according to the release. First, the order “prohibits the respondents, in connection with the sale of any product, from misrepresenting the status of any endorser or person reviewing the product,” according to the agency. This includes misrepresentations that the endorser or reviewer is an independent or ordinary user of the product.

Next, the order “prohibits the respondents from making any representation about any consumer or other product endorser without clearly and conspicuously disclosing any unexpected material connection between the endorser and any respondent or entity affiliated with the product.” Such disclosures must be made in close proximity to the product review or endorsement.

In addition, the order requires the respondents to instruct their employees and agents about their responsibilities to clearly and conspicuously disclose their connections to the respondents’ products in any endorsements.

The Commission vote approving the administrative complaint and proposed consent order in the Sunday Riley matter was 3-2, with Chopra and Slaughter voting no.

The public may submit comments on the proposed consent order through Regulations.gov. The comment period opened on Oct. 25. Comments will be accepted for 30 days from publication in the Federal Register, after which the agency will decide whether to make the proposed consent order final. Comments received will be posted on Regulations.gov.

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US Total Pet Spending Climbs to $78.6B

Growth was muted compared to the prior year.

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Total pet spending in the U.S. climbed by 1.9 percent in 2018 to reach $78.6 billion, according to the Pet Business Professor blog.

The $1.47 billion increase was well below the $9.84 billion jump seen in 2017, the blog’s John Gibbons writes.

Here’s how the market shook out by segment in 2018:

  • Food: -$2.27B (-7.3%) decrease
  • Supplies: $1.22B (+6.6%) increase
  • Veterinary: $0.56B (+2.7%) increase
  • Services: $1.95B (+28.9%) increase

A mix of factors led to the relatively muted growth.

“The FDA warning regarding grain free dog food wreaked havoc in the second half and the new tariffs on supplies flattened spending during that period,” explains. “Veterinary prices turned up again resulting in a net “no gain” in the amount purchased by consumers.”

Additionally, he said, many young adults who’d been living with their parents ended up moving out with their pets in tow.

Services segment “saved the year with a spectacular increase in spending as consumers finally responded to the convenience of significantly more outlets,” he writes.

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Purina Opens $320M Factory

Currently nearly 200 employees work at the plant.

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HARTWELL, GA — Nestlé Purina PetCare Co. recently commemorated the opening of its 21st factory in the U.S. in Hartwell, GA.

With a total investment of more than $320 million, the new Hartwell factory is Purina’s first new U.S. factory in two decades and represents Nestlé’s single largest investment in a pet care facility in the last decade in the U.S., Canada and Latin America. Currently nearly 200 employees work at the Hartwell facility, and the number will grow to 240 as new lines and other expansions at the site are completed over the next few years, the company said in a press release. Purina also operates a manufacturing facility in Fairburn, Georgia, which employs 350 people.

“Nestlé Purina is focused on delivering world-class products and is one of our key growth pillars for Nestlé,” said Laurent Freixe, Nestlé CEO for the Americas. “Purina is in a position of strength for long-term sustainable growth and this investment in Hartwell demonstrates Nestlé’s commitment to continually innovate and shape the future of pet care.”

Purina announced its investment in Hartwell in 2017 and began initial operations of a distribution center at the site in spring 2018. The company purchased a long-idled textile facility that it set out to remake and rebuild with the installation of modern equipment and technology for production of brands including Fancy Feast. The opening marks the first step in launching the Hartwell factory’s production.

“Through this investment in Hartwell, Purina is continuing to deliver science-based nutrition made to the highest standards of quality and safety that pet owners have come to trust for more than 90 years,” said Joseph Sivewright, Purina CEO. “Purina’s Hartwell team is critical to helping us deliver quality nutrition so pets can live longer, healthier lives with their owners. We’re very excited to be a part of the Hartwell community, and we’re proud of the great teamwork by everyone involved to build a world-class facility that will operate in a sustainable way.”

The Hartwell factory is using innovative water conservation and treatment methods, aims to be powered by 100 percent renewable electricity in the near future and currently sends zero waste for disposal to traditional landfills, instead utilizing composting, recycling and energy recovery, according to the release.

Purina’s investment in Hartwell also makes a significant contribution to the local economy and community. Purina has engaged with the community since work began in early 2018 by actively supporting local pet shelters and rescues, education, civic causes and hunger relief.

At the grand opening ceremony for the new factory, Purina also announced a $20,000 donation to the Northeast Georgia Council on Domestic Violence as part of its Purple Leash Project, a partnership between Purina and national non-profit RedRover.

“I am proud to congratulate Purina on the opening of their 21st U.S. factory in Hart County,” said Georgia Gov. Brian P. Kemp. “As one of the nation’s leading pet food companies, Purina’s expansion into Hartwell and continued commitment in Fairburn are creating exciting opportunities for hardworking Georgians and their families, and I am grateful for their investment in our state. I am excited to see another member of the Georgia Made family grow their operations, and I have no doubt that our top-notch workforce will ensure Purina’s continued success in the years ahead.”

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10,000 Dogs Wanted: Study Will Look at Canine Aging

It’s called the Dog Aging Project.

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(PRESS RELEASE) Everyone who loves a dog wants the animal, whether pet or work companion, to enjoy as many years as possible. Learning the whys behind the length and strength of dogs’ lifespans has become the impetus for the largest research data-gathering program of its kind, the Dog Aging Project.

The initiative is jointly operated by the University of Washington School of Medicine and the Texas A&M University College of Veterinary Medicine & Biomedical Sciences. It will create a national community of dogs, owners, veterinarians, researchers and volunteers, all working together to advance knowledge about how genes, habits and the environment influence dog aging.

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Although the project has been in its preliminary stages for a while, its full-throttle launch was announced Nov. 14 at the annual Gerontological Society of America meeting in Austin, TX. After that date, owners can nominate their canine as a candidate on the Dog Aging Project website.

Nomination involves creating a secure user portal and providing comprehensive health and lifestyle information about the dog through questionnaires and the sharing of veterinary medical records.

Dogs of every age, from puppy to senior; all sizes, from miniature to huge; male and female; neutered or not; and living in all types of locations are invited to be nominated. Healthy dogs and those with chronic illness will be considered.

“All owners who complete the nomination process will become Dog Aging Project citizen scientists and their dogs will become members of the Dog Aging Project ‘pack.’ Their information will allow us to begin carrying out important research on aging in dogs,” said one of the project’s trio of directors, biology of aging expert Daniel Promislow, professor of pathology at the University of Washington School of Medicine and a UW professor of biology.

Also leading the multi-institutional project are veterinarian Dr. Kate Creevy, associate professor of veterinary internal medicine at the Texas A&M University College of Veterinary Medicine & Biomedical Sciences, and longevity and healthspan researcher Matt Kaeberlein, a professor of pathology at the University of Washington School of Medicine. More than 40 other researchers from a variety of fields and institutions will join them in this endeavor.

“Aging is the major cause of the most common diseases, like cancer and heart problems. Dogs age more rapidly than people do and get many of our same diseases of aging, including cognitive decline,” said Kaeberlein. “They also share our living environment and have a diverse genetic makeup. This project will contribute broadly to knowledge about aging in dogs and in people.”

Over the 10-year project, scientists will gather information on the 10,000 enrolled dogs in a collaborative, open-data platform. This means that, like the Framingham Heart Study and the All of Us research program, the massive amount of data can be analyzed by scientists around the world in a variety of ways. For this study, the largest of its kind ever undertaken, the dogs will be followed throughout their lifetimes.

“We are excited to work with companion dogs in this research program. As a veterinarian, it is important to me that our work benefits dogs directly. But our work with dogs has the added value of shedding light on the human aging experience as well,” Creevy said.

The researchers emphasized that their goal is not merely to increase life expectancy; their target is not lifespan, but healthspan, which refers to the period of life spent free from disease. Improved quality of life in advanced age is a goal many people have for their dogs and for themselves.

The Dog Aging Project will have four key endeavors:

  1. New metrics of canine aging: The research team will develop tests to measure each dog’s changes in physical function as it gets older. There are such tests in older human adults, like moving from seated to standing, grip devices, or age-specific normal ranges on blood chemistry values. For dogs, however, aside from owner observations, there are few standardized assessments.
  2. Genetics of aging: Genome sequencing data from all 10,000 dogs will be integrated with health measurements and behavioral traits in comprehensive genome-wide association studies.
  3. Systems biology of aging: Scientists will look for molecular predictors of disease, decline or longevity.
  4. Medication intervention study: About 500 middle-aged dogs will be part of a trial to assess the effects of rapamycin on cognition, heart function, healthspan, and lifespan.

The project is supported by a federal grant from the National Institute on Aging at the National Institute of Health (UI19AG057337) and private donations.

The participating institutions are:

Core Research Leads

Purdue University

Princeton University

Texas A&M University

Arizona State University

Cornell University

University of Massachusetts Medical School

Broad Institute of MIT and Harvard

University of Washington College of Arts & Sciences

University of Washington School of Medicine

University of Washington School of Public Health

Fred Hutchinson Cancer Research Center

Seattle Children’s Hospital

Veterinary Schools

Texas A&M College of Veterinary Medicine

University of Georgia College of Veterinary Medicine

North Carolina State College of Veterinary Medicine

Iowa State University College of Veterinary Medicine

Colorado State University College of Veterinary Medicine and Biomedical Sciences

Oregon State University Carlson College of Veterinary Medicine

Washington State University College of Veterinary Medicine

Credit: UW Medicine

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