FTC Takes Action Against Sitejabber for Misleading Consumer Reviews

This week, the Federal Trade Commission (FTC) announced a proposed settlement with GGL Products, also known as Sitejabber, an AI-driven review platform accused of publishing misleading consumer reviews. According to the FTC, Sitejabber allegedly allowed businesses to deceptively inflate their star ratings and review counts, violating Section 5 of the FTC Act, which prohibits deceptive or unfair business practices.

AI in Consumer Reviews and FTC Oversight

As online shopping has grown, customer reviews and star ratings have become crucial tools for consumers deciding where to spend their money. Platforms have increasingly turned to AI to help manage and display these reviews, hoping to capture user feedback efficiently. However, AI’s use in this area has also led to challenges around transparency and accuracy.

To address these concerns, in August of 2024, the FTC announced a Final Rule Banning Fake Reviews and Testimonials, an initiative focused on holding companies accountable for deceptive uses of AI, particularly in consumer-facing areas like product reviews. The rule prohibits businesses from buying or selling fake reviews, using insider reviews without disclosure, and misrepresenting company-owned sites as independent. The rule also stops businesses from hiding negative reviews or buying fake social media followers and views, and empowers the FTC to seek civil penalties against violators.

Sitejabber’s Alleged Manipulation of Consumer Reviews

Sitejabber hosts company profile pages featuring star ratings and customer reviews for a variety of brands. To populate these profiles, the platform uses an “instant feedback” tool that collects customer impressions right at the checkout stage. However, according to the FTC, Sitejabber allegedly displayed these initial impressions as full product reviews, misleading consumers with inflated star ratings that suggested a higher level of post-purchase satisfaction. This practice of using pre-purchase feedback as actual reviews contributed to misleading consumer reviews, potentially causing shoppers to believe the ratings reflected true product experiences, rather than just impressions based on the shopping process.

The FTC’s complaint details how Sitejabber’s “instant feedback” surveys were collected at checkout, before customers had received or used the products. As a result, most ratings on Sitejabber’s platform reflected only the shopping experience, not actual product satisfaction. To make matters worse, Sitejabber reportedly concealed this information in small “mouseover” disclosures, requiring users to dig through profile details to learn that the ratings were based primarily on checkout experiences. For casual shoppers, the FTC argues, this lack of clarity led to inflated reputations for some companies on Sitejabber’s platform.

Lack of Clarity in Review Disclosures

Beyond the survey-based ratings, the FTC criticized Sitejabber for its lack of transparency in disclosing how ratings were generated. According to the complaint, Sitejabber failed to clearly inform consumers that most star ratings on its site came from pre-purchase surveys, not from actual product experiences. Instead, users had to hover over ratings and navigate through several sections to uncover this information. The FTC argues that this lack of clear and conspicuous disclosure gave an unfair advantage to companies that appeared to have high satisfaction ratings when, in reality, those ratings were largely based on checkout feedback.

One example in the complaint illustrates how significantly these practices could inflate ratings. An online furniture retailer’s profile on Sitejabber showed an impressive 4.72-star average across more than 83,000 reviews, suggesting a high level of customer satisfaction. However, nearly all these reviews were based on checkout feedback, with fewer than 1% coming from verified purchasers. Without the checkout feedback, the retailer’s profile would have displayed only 1,443 reviews with an average rating of just 2.19 stars, showing a much different picture of customer sentiment.

The FTC’s Proposed Settlement and Its Implications

The proposed settlement does not include any monetary penalties but prohibits Sitejabber from making or supporting any false claims about product ratings, ensuring that displayed reviews reflect real customer experiences. Under the proposed terms of the settlement, Sitejabber must regularly report to the FTC on its compliance, maintain records for ten years, and allow the FTC to monitor its adherence. Once finalized, the settlement and its obligations will remain in effect for 20 years, thus serving as a clear warning to platforms relying on AI-driven review systems.

What This Means for Businesses and Review Platforms

This action is part of the FTC’s broader initiative “Operation AI Comply,” which focuses on companies using artificial intelligence in ways that could mislead consumers, with a special focus on consumer reviews and ratings.

As AI becomes more common in managing customer-facing content, the FTC is intensifying its efforts to ensure these tools are used responsibly and do not contribute to misleading consumer reviews. The Sitejabber case underscores the need for companies using AI to implement strict compliance measures and prioritize transparency to prevent the spread of misleading reviews. Businesses and platforms that rely on AI to manage customer feedback must approach these practices with caution, ensuring that all ratings and reviews displayed are accurate, transparent, and free from misleading information.