ADventures in Law

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Could someone please tell my mom that – no – playing three hours of Frogger every day on a hand-me-down Atari did not in fact “melt my brain”? I’m still capable of thoughtful legal analysis, with the help of brilliant BakerHostetler associates (and avid gamers) Carolina Alonso and Jamie Kim. We’ve written before about the Federal Trade Commission’s (FTC) quest to root out fake reviews and endorsements, which is of particular concern in the video game space. And this week, the FTC held an informal hearing on its <a href="https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-proposed-rule-banning-fake-reviews-testimonials">proposed rule to address the issue of fake reviews and endorsements</a> (Proposed Rule) on third-party review aggregator sites. We watched so you didn’t have to. Below is a recap of the Proposed Rule and how it applies to the gaming industry.

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For the gamers who may have missed the news: Sandwiched between the summer 2023 releases of The Legend of Zelda: Tears of the Kingdom and Baldur’s Gate 3, the FTC proposed a new rule on the use of consumer reviews and testimonials. The goal of the Proposed Rule is to address the issue of fake reviews and endorsements by banning the creation, purchasing and dissemination of fake reviews, repurposing reviews for different products, buying positive reviews, using insider reviews without clear disclosures, and other misleading practices, like review suppression and selling fake social media indicators. The Proposed Rule also seeks to impose civil penalties on violators, which the FTC hopes will deter deceptive review practices.

For the nostalgic Gen X crowd that was still playing the new Mario vs. Donkey Kong on Switch, we’ll recap the FTC’s Feb. 13 informal hearing on the Proposed Rule. Representatives from Fake Review Watch, the Interactive Advertising Bureau (IAB), and academic researchers in the field of marketing made presentations to voice support and/or concerns. Their reviews on the Proposed Rule? Decidedly mixed.

Fake Review Watch outlined evidence gathered on the widespread problem of fake online reviews across various platforms such as Google, Yelp, and other platforms. It highlighted cases where businesses benefited from fake reviews and suggested it was the platforms’ role to police this issue. One example detailed how a New York orthopedic surgeon generated fake reviews and suppressed legitimate negative reviews. The presentation criticized review platforms for not taking sufficient action to address review fraud and proposed that the FTC’s new rule, while a positive step, fails to apply to third-party review platforms. Fake Review Watch called for increased transparency via central controls at the platform level.

The IAB, representing media companies, marketers, agencies, and tech companies, expressed support for the FTC’s goals to improve the authenticity of reviews but raised concerns about the Proposed Rule’s language and potential overreach. It argued that vague terms and broad definitions could suppress legitimate reviews and disincentivize businesses from displaying reviews at all, potentially harming consumers. The IAB understands consumer behavior and knows consumers look to each other to decide which shoes to buy and which games to download. The IAB highlighted the importance of consumer reviews for informed decision-making and emphasized the need for a rule that precisely targets bad actors without stifling legitimate business activities or overburdening third-party review platforms. Not to be ignored, the IAB also raised concerns that the FTC seems to be exceeding its field of view, calling out the commission’s procedural choices and suggesting they might impair the substantive rulemaking record.

A third group of marketing researchers also testified. After multiple AV glitches (we’ve all been there), the group presented findings from their studies on how online review platforms can build consumer trust while combating fake reviews. They defined trust and discussed five mechanisms for building it: (1) identity disclosure, (2) monitoring, (3) sanctioning, (4) community building, and (5) status endowment. Their research suggested that while all five mechanisms could enhance trust, identity disclosure was the least effective and could introduce both bias and privacy risks. They recommended that review platforms adopt the other four mechanisms more robustly and advised against mandating identity disclosure for reviewers. The presentation underscored the importance of clear communication by platforms about their use of these mechanisms to build trust among consumers.

While the informal hearing covered a lot of ground about how third-party review aggregators could implement practices to avoid fake positive reviews and suppression of negative reviews by business owners, the discussion highlighted a void. The commenters did not address the other side: “review bombing” by consumers. In the video game industry especially, review bombing is common with new games. With little oversight over review content, groups of players – sometimes loyalists of a competitor’s game – sometimes organize review bombing campaigns to express dissatisfaction or protest, impacting the perception of newly-launched games even before many consumers have a chance to play them.

While the Proposed Rule mainly focuses on prohibiting <em>businesses</em> from soliciting and posting fake and manipulative reviews, <em>consumers’</em> mass coordination to negatively impact a game’s ratings (if unfair and untrue) can be seen as a manipulation of the review system. Review bombing can erode trust in the review process, as potential buyers may find it challenging to determine the genuine quality and value of a game. This distrust persists even where review bombing may paradoxically increase sales due to heightened publicity. Decreased goodwill can harm the reputation of developers, publishers, and game series, potentially affecting future projects and the broader perception of a brand.

Review bombing could be addressed by some of the mechanisms the researchers presented at the informal hearing. Online platforms that host game reviews could implement a way to detect and address abnormal review patterns or provide more context for potential buyers about the nature of sudden review influxes, distinguishing between genuine consumer sentiment and review bombing campaigns. This could include introducing filters to help users identify and exclude off-topic review activity from review scores. As digital storefronts and review platforms continue to evolve, so too will the strategies for managing and leveraging user reviews, aiming to protect both consumers and creators in the digital economy.

10/10 Would Recommend: The FTC’s Proposed Rulemaking on Fake Reviews and Endorsements Indirectly Addresses Review Bombing in Video Games