deceptive advertising

Deceptive Amazon Marketing and the FTC

On February 16, 2023, the Federal Trade Commission (“FTC”) fined The Bountiful Company (“Bountiful”) $600,000 for its misleading marketing practices on the Amazon e-commerce site. The FTC is a United States governmental agency whose primary mission is to protect consumers and enforce civil antitrust laws. Bountiful is a New York State corporation that markets and sells vitamins, minerals, and other supplements primarily through the Nature’s Bounty and Sundown brands. The FTC’s complaint alleged that Bountiful knowingly abused an Amazon convenience feature to market its newer/underperforming products by using reviews for Bountiful’s established products. After reviewing the allegations, Bountiful signed a Consent Agreement with the FTC, agreeing to a fine of $600,000, as well as mandatory injunctive provisions. The complaint against Bountiful was the first FTC case involving Amazon “review hijacking.” Because it will certainly not be the last, vendors engaged in Amazon marketing would be well-advised to understand the allegations involved in the Bountiful proceeding.

What Were the Specific Bountiful Deceptive Amazon Marketing Allegations?

According to the FTC, Bountiful engaged in “review hijacking,” by stealing or repurposing reviews of its other established products. On multiple occasions, Bountiful is alleged to have misled Amazon consumers by combining product pages of different Bountiful supplements in order to artificially boost the review numbers and ratings for some of its newer/underperforming products.

Amazon’s variation policy allows vendors to group products together on the same page as long as the only differences between them are minor. For example, different quantities and flavors of a company’s Vitamin D gummy may be advertised on the same page, and share the same reviews and badges. The FTC alleged that Bountiful exploited Amazon’s variation policy to market completely different supplements on the same page. By listing newer, unpopular supplements, as variants of older, well-established, products, the newer items benefited from the positive reviews, ratings, and Amazon badges of the older products.

In its complaint, the FTC included numerous internal emails demonstrating that Bountiful intentionally manipulated Amazon’s variation policy in order to boost sales of some of its new products. For example, in an August 2020 email, a Bountiful executive explained that Bountiful “got creative” and “created variations with some of our [new products] to try and ramp them faster as they were NOT selling and we wanted to give them a little boost in R[atings]&R[eviews] to gain visibility and allow them to also borrow the ‘amazon choice’ badge and best seller badge which worked.” In a November 2020 email, the same executive  explained that her strategy of listing new products with “top sellers” allowed the new products “to essentially ‘borrow’ the best-selling flags, ratings, and reviews, and first page placement” of the top sellers, that she was “using this strategy with all of our launches,” and that the strategy was “extremely successful” for the “Zinc gummy.”

By taking action against Bountiful, the FTC sends a clear message to the industry that it will take the steps necessary to protect consumers from misleading marketing on Amazon.

How Can Companies Ensure FTC Compliance when Marketing on Amazon?

In addition to being fined $600,000, Bountiful also agreed to future marketing restrictions contained in the FTC Consent Agreement. Companies advertising on Amazon can employ these marketing restrictions as a checklist to help avoid FTC scrutiny:

Products or services must not make any misrepresentation:

A. that a reviewer or other person reviewed, endorsed, or used the product or service; 

B. about the number of ratings or reviews the product or service has received; 

C. about the average star rating of the product or service; 

D. about the product or service being a best seller; or 

E. about the product or service having earned an Amazon’s Choice badge or designation.

In addition, companies must not:

A. create or request the creation of variation or other relationships between different products sold on Amazon.com or any other online shopping platform or website; or 

B. otherwise procure, suppress, boost, organize, selectively publish, up-vote, down-vote, or edit consumer reviews or ratings of products or services, 

in any manner that distorts or otherwise misrepresents what consumers think of such products or services.

As mentioned above, this was the first FTC case involving review hijacking. It is unlikely to be the last. As most Amazon shoppers know, many items are listed on variant product pages. Companies engaged in marketing on Amazon and other e-commerce sites should retain counsel to ensure that their products are properly advertised.

If you require assistance with complying with the FTC’s rules and regulations as they pertain to Internet marketing, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Photo by ANIRUDH on Unsplash

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David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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