FTC Cracks Down on Fake Amazon Reviews with Major Settlement

On February 26, 2019, the Federal Trade Commission (FTC) successfully settled a landmark case regarding fake Amazon reviews. The FTC’s complaint alleged that Cure Encapsulations, Inc. had paid a third party to generate Amazon reviews falsely advertising its product, a supplement of garcinia cambogia—a plant, which many have claimed as contributing to weight loss, but actually known to cause acute liver failure.

Cure Encapsulations had been paying Amazon Verified Reviews to ensure the product’s Amazon rating stayed above 4.3 out of 5 stars since 2014. The FTC found those reviews to be false and unsubstantiated, and filed its complaint on February 19, 2019, only to settle less than a week later.

Amazon internally investigates its site for false reviews, but this is the first major crackdown regarding fake Amazon reviews by the FTC. As part of the settlement, Cure Encapsulations must inform Amazon that it paid for reviews and notify all customers who bought the product. The FTC also fined the company $12.8 million, but only required $50,000 upfront; the rest is for enforcing its judgment.

For further reading, see Kaitlyn Tiffany’s article on Vox and Nick Statt’s article on The Verge.

Advocates believe Kid Influencers Deserve Same Protections as Other Child Stars

Although there are child labor laws in California that are designed to protect child stars from exploitation (The Coogan Act), the same protections don't always apply to child YouTube and Instagram stars, or kid influencers. Kid Influencers accounts are usually run by their parents since platforms like YouTube and Instagram have age limits of 13 years old. One consequence of not owning their accounts is that all profits received go directly to the guardians and, unlike traditional child actors in California, these guardians are not required to set aside some of the profits for the children. Advocates like Paul Petersen, believe the legal protections like those in California should apply to children outside of the state. Petersen has said that because YouTube is in San Bruno, California and they are paying to broadcast children, California law must apply to those child stars. Many guardians of kid influencers feel these regulations are unnecessary and that the guardians are doi...

CARU Speaks at Community Board in Manhattan

CARU staff attorney Andra Dallas gave a presentation to Community Board 1, serving lower Manhattan on Monday, December 7 th . Andra spoke to the Board’s Youth Committee about the importance of teaching children about understanding advertising and safe online practices. District Manager Noah Pfefferblit remarked, “thank you for your informative presentation to our Youth Committee members,” and offered the Board’s assistance if they “can be helpful to the important efforts at the Children's Advertising Review Unit.” Are you interested in having a CARU staff member visit your community board? Contact adallas@caru.bbb.org.

Kids Internet Design and Safety Act Seeks to Protect Children from Harmful Online Content

United States Senators, Mr. Richard Blumenthal from Connecticut and Mr. Edward Markey from Massachusetts, introduced a new bill referred to as the Kids Internet Design and Safety Act (the “KIDS Act”). One of the Senator’s introducing the KIDS Act, Mr. Edward Markey, was the co-author of the Children’s Online Privacy Protection Act (“COPPA”). The KIDS Act seeks to include noteworthy advertising rules and create new protections for children online, specifically for online users under the age of 16. The proposed advertising rules within the KIDS Act are to ban websites from: (1) exposing young online users to advertisements “with embedded interactive elements”; (2) recommending any content involving alcohol, nicotine, or tobacco to young online users; and (3) recommending content that includes influencer marketing, like unboxing videos, or host-selling to young online users. Additionally, the KIDS Act seeks to prohibit certain online features to protect children, like prohibiting...

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