Tim, I read your post and immediately fired up “Me and My Uncle” by the Grateful Dead. The established reviewing community is “as honest as a Denver man could be.”
I was one of the leaders who fought MQA. Not a lot of honestly on the reviewers side.
FTC Cracks Down on Reviewers
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I was one of the leaders who fought MQA. Not a lot of honestly on the reviewers side.
Here is the actual rule:
§ 465.4 Buying Positive or Negative Consumer Reviews.
It is an unfair or deceptive act or practice and a violation of this part for a business to provide compensation or other incentives in exchange for, or conditioned expressly or by implication on, the writing or creation of consumer reviews expressing a particular sentiment, whether positive or negative, regarding the product, service, or business that is the subject of the review.
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Here is the actual rule:
§ 465.5 Insider Consumer Reviews and Consumer Testimonials.
(a) It is an unfair or deceptive act or practice and a violation of this part for an officer or manager of a business to write or create a consumer review or consumer testimonial about the business or one of the products or services it sells that fails to have a clear and conspicuous disclosure of the officer’s or manager’s material relationship to the business, unless, in the case of a consumer testimonial, the relationship is otherwise clear to the audience.
(b)(1) It is an unfair or deceptive act or practice and a violation of this part for a business to disseminate or cause the dissemination of a consumer testimonial about the business or one of the products or services it sells by one of its officers, managers, employees, or agents, which fails to have a clear and conspicuous disclosure of
the testimonialist’s material relationship to the business, when the relationship is not otherwise clear to the audience and the business knew or should have known the testimonialist’s relationship to the business.
(2) However, paragraph (b)(1) of this section does not apply to:
- (i) generalized solicitations to purchasers for them to post testimonials about
their experiences with the product, service, or business, or - (ii) merely engaging in consumer review hosting.
- (i) the solicitation or demand results in an officer’s or manager’s immediate relatives, an employee or agent, or the immediate relatives of an employee or agent writing or creating such a review without a disclosure of the reviewer’s material relationship to the business, and
- (ii) the officer or manager:
(b) did not instruct that prospective reviewers disclose clearly and conspicuously their relationship to the business, or
(c) knew or should have known that such a review appeared without such a disclosure and failed to take remedial steps.
(2) However, paragraph (c)(1) of this section does not apply to generalized solicitations to purchasers for them to post reviews about their experiences with the product, service, or business.
(I do not know why the outline numbering is repeating.)
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This rule requires the consumer testimonial of officers, managers, employees and agents of a manufacturer to "disclose clearly and conspicuously" such person's relationship to the manufacturer.
The distributor of a manufacturer, and the dealers representing that manufacturer and a brand ambassador for that manufacturer typically would not be an agent under principal/agent law. So this rule does not attach to the consumer reviews or to the consumer testimonials of a distributor or of a dealer or of a brand ambassador.
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Here is the actual rule:
§ 465.7 Review Suppression.
It is an unfair or deceptive act or practice and a violation of this part:
(a) for anyone to use an unfounded or groundless legal threat, a physical threat, intimidation, or a public false accusation in response to a consumer review that is made with the knowledge that the accusation was false or made with reckless disregard as to its truth or falsity, in an attempt to:
- prevent a review or any portion thereof from being written or created, or
- cause a review or any portion thereof to be removed, whether or not that
review or a portion thereof is replaced with other content, or
consumer reviews of one or more of the products or services it sells displayed in a portion of its website or platform dedicated in whole or in part to receiving and displaying consumer reviews represent most or all the reviews submitted to the website or platform when reviews are being suppressed (i.e., not displayable) based upon their ratings or their negative sentiment. For purposes of this paragraph, a review is not considered suppressed based upon rating or negative sentiment if the suppression occurs based on criteria for withholding reviews that are applied equally to all reviews submitted without regard to sentiment, such as when:
- (1) the review contains:
- (i) trade secrets or privileged or confidential commercial or financial
information, - (ii) defamatory, harassing, abusive, obscene, vulgar, or sexually
explicit content, - (iii) the personal information or likeness of another individual,
- (iv) content that is discriminatory with respect to race, gender,
sexuality, ethnicity, or another intrinsic characteristic, or - (v) content that is clearly false or misleading;
- (i) trade secrets or privileged or confidential commercial or financial
- (2) the seller reasonably believes the review is fake; or
- (3) the review is wholly unrelated to the products or services offered by or
available at the website or platform.
- (1) the review contains:
Ron - from your reading, does a comprehensive "comment" by a "well-known person" on WBF fall under the ruling?
Consumer review means a consumer’s evaluation, or a purported consumer’sevaluation, of a product, service, or business that is submitted by the consumer or purported consumer and that is published to a website or platform dedicated in whole or in part to receiving and displaying such evaluations.
Consumer testimonial means an advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a consumer who has purchased, used, or otherwise had experience with a product, service, or business.
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It is interesting that "promotional message" is not a defined term. What does a post have to say to become elevated beyond a "consumer review" to a "consumer testimonial" because it is, or because it contains, a "promotional message"?
Consumer testimonial means an advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a consumer who has purchased, used, or otherwise had experience with a product, service, or business.
__________________________________________________________________________________________________
It is interesting that "promotional message" is not a defined term. What does a post have to say to become elevated beyond a "consumer review" to a "consumer testimonial" because it is, or because it contains, a "promotional message"?
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I'd like to agree with you, but I think there is more to it than obvious real celebrities.
Celebrity testimonial means an advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a well-known individual who purchased, used, or otherwise had experience with a product, service, or business.
In the comments explanation:
The commenter requested that the Commission provide further guidance on what constitutes a “well-known” individual. Based upon common usage, well-known individuals include those famous in the areas of entertainment, such as film, music, writing, or sport, and those known to the public for their positions or successes in business, government, politics, or religion.
This clearly is talking about real celebrities.
But then the explanation continues . . .
Individuals who earn money through their work as “influencers” are also well known, as are those who have been featured in the news or media. More important, whether someone is well known does not matter for purposes of rule interpretation and enforcement because any provisions that apply to celebrity testimonials also apply to consumer testimonials.
And then . . .
To be “well known,” one need not have such pervasive fame as to be a public figure for all purposes and in all contexts. For example, an influencer may be well known to a subset of individuals interested in a particular subject. The commenter gave no justification for narrowing the definition of a “celebrity testimonial,” and the Commission declines to do so.
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I think we can drop all discussion of "celebrity testimonial." It seems that none of the rules which touch high-end audio involve the definition of "celebrity testimonial."
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How do we apply this rule to the facts of a professional reviewer (i) whose employer receives advertising revenues from manufacturers, or (ii) who receives an accommodation discount to purchase a component, or (iii) who receives a component on long-term "loan"?
Is the review of a professional reviewer writing a "consumer review"? Or is it a "celebrity testimonial"? Can a review be both a "consumer review" and a "celebrity testimonial"? If the review of a professional reviewer is a "celebrity testimonial" but not a "consumer review," then this rule does not attach.
The answer is that a review by a professional reviewer is a "consumer review":
A comment from an individual asserted that the “definition of ‘consumer’ implies an individual who purchased the product for their own use” and that when a “product is provided by the company seeking a review, for the purposes of it being reviewed, the reviewer is arguably not a consumer.” The Commission disagrees that a “consumer” is necessarily a purchaser. For purposes of the rule, a consumer is a person who purchased, used, or otherwise had experience with a product, service, or business. (emphasis added)
There is a lot of analysis about the nature of the implied conditioned, and the fact that the condition is a "particular sentiment":
First, § 465.4 does not apply to testimonials, only to consumer reviews, and then only to reviews that appear on a website or portion of a website dedicated to receiving and displaying such reviews. A blogger’s “review” is not considered a consumer review for purposes of the rule; if such a review was incentivized, it would be considered a testimonial.
Second, § 465.4 does not prohibit paid or incentivized consumer reviews. It only prohibits paid or incentivized consumer reviews when the business soliciting the review provides compensation or an incentive in exchange for a review expressing a particular sentiment.
. . .
A consumer organization said in its comment that, “[w]hen a reviewer feels pressured to express a certain sentiment, regardless of how that pressure was generated, the net result is a deceptive review,” and that there should be “no distinction made between explicitly and implicit conditioning of compensation or other incentives.” A second consumer organization commenter said that “implied conditions may be just as salient as express conditions” and quoting Aronberg v. FTC, 132 F.2d 165, 167 (7th Cir. 1942), said that, “in interacting with businesses, ‘[t]he ultimate impression upon the mind of the reader arises from the sum total of not only what is said but also of all that is reasonably implied.’” The Commission agrees with both of these commenters.
. . .
Two commenters, an individual and a review platform, requested that § 465.4 go further and prohibit all incentives given in exchange for reviews regardless of any requirement to express a particular sentiment. An individual commenter would have the Commission “require businesses to disclose any form of incentive that they provide or arrange for reviewers.” These requests are beyond the scope of this rulemaking but are addressed in the Endorsement Guides, which provide that unexpected material connections such as incentives given in exchange for customer reviews without any requirement as to the sentiment of the reviews must be disclosed clearly and conspicuously. The Commission continues to believe that this principle from the Endorsement Guides is an appropriate expression of what incentivized review practices would or would not violate Section 5 of the FTC Act. In any event, there is no basis on the current rulemaking record for the Commission to conclude that all incentivized reviews should be prohibited or that all incentivized reviews should require a disclosure.
_______________________________________________________________________________________________
The bottom line here is that there is no violation of this rule unless the review is conditioned upon "expressing a particular sentiment." I am surprised that this is the way the rule was written. Usually the administrative agency does not make it so hard on itself to prove a case. Here the FTC has to show that the review was conditioned upon "expressing a particular sentiment." This strikes me as a difficult element for the FTC to prove and an easy element for the manufacturer and the reviewer to circumvent.
Professional reviewers would say that while the manufacturers hope for a positive review the (i) advertising revenues to their employers, (ii) the accommodation discounts they receive and (iii) the long-term "loans" they receive are not conditioned upon "expressing a particular sentiment."
Given the reality that manufacturers would not give accommodation discounts or long-terms "loans" to reviewers who consistently, or perhaps ever, publish unfavorable reviews of the manufacturer's products, and that manufacturers would not advertise in a magazine which consistently, or perhaps ever, publishes unfavorable reviews of the manufacturer's products, it is surprising to me that the FTC accepted the hurdle of having to prove that the review was conditioned upon "expressing a particular sentiment." It is surprising, but very welcome, that the FTC chose not to overreach in this particular instance. It makes me think that Lina Khan was not directly involved in this particular rulemaking.
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So what does this to accommodation pricing that is common and one of the reasons people become professional magazine reviewers. Also this dictates pricing in general as many prices have discounts built into them. Is industry going to lower retail and then give no discount, or keep the retail and take out the discount?
I’ve twice been involved in disputes that went to the Supreme Court over the meaning of certain words. About 20 years ago, I had a case which rested on the difference between an agency and a joint venture. This is very important in European law and is very relevant to audio distributors.
More recently, I had a case go to the Supreme Court over the words “in default“. Even after the supreme court, we had a lengthy arbitration and the whole thing took about nine years.
Around the world, it’s often the case that statute and regulations only really take shape after they’ve been tested and shaped by the courts. You need claims where the parties have the time, money and inclination to go to a judicial decision. That is unlikely to happen with low volume publications as exist in the Audio world.
A bit tightly wound, Ron? Your imagination carries you away.
One can argue that a lot of products have misleading advertisements, particularly specifications. For example, display manufacturers used to tout the size of the displays, and someone took them to court over what a 19" display actually meant (diagonal width as opposed to something else). I think hard drive manufacturers do this all the time. A hard drive (or USB stick or flash drive or NVME element) is always advertised to have a certain read/write capability, but it is all fiction as it refers to usually a highly hypothetical case of reading or writing large files. On any given normal task, the actual performance is far below what the manufacturer claims. Exactly the same problem occurs in digital audio when DAC manufacturers or CD player vendors tout the specs of their product, but again the numbers touted are meaningless because they only refer to the completely unrealistic case of a 0 dB (full volume) signal. At actual volumes, which can be -30 dB to -50 dB below maximum, the distortion jumps dramatically and redbook CD is often no better than vinyl records, open reel tapes, or even the humble cassette tape. That's one reason people continue to listen to analog media and haven't completely abandoned them yet. If digital was truly 60 dB better than analog, meaning at the volumes most musical content is actually recorded at, analog would have perished long ago....
I am copying PYP's post on the "What is a Reviewer" thread to this thread because he is discussing the topic raised here and I do not want to turn that other thread into this one.
I agree that disclosure helps the industry.
In large part disclosure is out there but there are not neon arrows pointing at it. And I don't think it is everywhere. I can describe it for the site that publishes my reviews, Positive Feedback (PF)
First, if you click on a reviewers name for each review of his you will see a list or description of his equipment. That list identifies which components are long term loans. (I don't have any.)
Discounts, as you call them, I take to mean components purchased via industry accommodation. If you are a member of the audio industry (as reviewers are) you can request a purchase from another industry member at a cost lower than msrp. Often manufacturers and distributors accommodate the request (as they make use of this themselves) soley at their discretion but not all do. It is not limited to review components. An accommodation purchase may not be resold until a fixed time has past -- that time is often specified by the manufacturer and is a condition of any purchase.
This practice is not unique to audio. In the audio industry it is heavily regulated. Every publisher I've written for requires explicit permission be granted to make an accommodation purchase and that fact is disclosed by most publishers. No reviewer that I know discloses components made via industry accommodation.
Publishers are invested in honesty and have no desire to seek ruin from scandal caused by a reviewer. Reviewers who engage in unethical practices get fired -- at least for the publishers I've been with.
PF makes public their rules for reviewers. Here are examples with links to full text.
Editorial Philosophy - Positive Feedback
Positive Feedback is first and foremost a community, composed of writers and creative persons from around the world. Positive Feedback is an ongoing "work in progress," chronicling the efforts of audiophile listeners, reviewers, designers, manufacturers, distributors, and humorists to explore...
positive-feedback.com
Number 5: All "accommodation pricing" transactions involving review gear are to be cleared by either yours truly or Dave Clark, personally. NO EQUIPMENT IS TO BE PURCHASED VIA "ACCOMMODATION TO POSITIVE FEEDBACK WRITERS/EDITORS" WITHOUT EITHER DAVE CLARK'S OR MY EXPRESS APPROVAL. ...
Number 6: THERE ARE NO QUID PRO QUO'S OF FAVORABLE REVIEWS IN EXCHANGE FOR ANY CONSIDERATION AT POSITIVE FEEDBACK .
You will NOT promise a favorable review in exchange for anything. Ever.
You do, and you're gone; it'll be my boot chasing your hindmost parts out the door.
Review Process Disclaimer and Policy - Positive Feedback
Revised 2023 Positive Feedback (hereinafter PF) is a review journal and creative forum for audio and video equipment, recordings, accessories, and anything else related to the audio and video arts. We are here to educate and entertain our readers, who trust us to provide them with our...
positive-feedback.com
As with most endeavors, there is no overarching set of rules that governs the audio industry or audio publications specifically. I believe it better for audio and other industries to self-regulate than receive dictates from centralized government. That said there are free associations of publishers who agree to common principles.
There is a big difference between reviews/testimonials and advertising. These rules are clearly addressed at commonly used tactics in online selling that are completely different from the issues with audio reviews. Anyone who has run on Amazon business knows the importance of getting your product on the first page of a search. It’s absolutely massive, really the make or break of selling a product on Amazon. These rules are designed to prevent the tactic of getting employees, agents, family, and other related parties to post a positive review, for their account to be used to post a positive review without their knowing, et cetera.
Advertising is a different issue. Here in the UK we have an independent regulator that works effectively and has extremely detailed rules that are easy to understand. Consumers can make a complaint and, if upheld, will be complied with.
Home
The Advertising Standards Authority (ASA) is UK's regulator of advertising. We apply the Ad Codes, written by the Committees of Advertising Practice (CAP).
www.asa.org.uk
I once made a complaint. It is done online and took five minutes. Many other people made the same complaint. It was upheld. There was a major international football tournament hosted in the UK a few years ago. The major sponsor was Heineken and they did a massive TV advertising campaign with a story about someone travelling halfway round the world with a bottle of Heineken in his bag and finally arrives at the football stadium for the final match and takes out his beer and drinks it. The problem was that, having spent millions producing the advert and broadcasting it, no one appreciated that it is illegal to drink alcohol in the seating area of a football stadium. You can buy and drink beer in the concourses underneath the stand, but you can’t actually take alcohol to your seat.
Heineken tried to argue that it was a generic football stadium and not necessarily in the UK, which did them no good because the advertisement was specifically for a tournament being held in the UK.
This kind of regulation of advertising is done on a self regulated basis for the good of the industry.. Here in the UK it is a system that works, but you will see from the rules that they are very specific and there are detailed rules for various different industries.
It will be interesting to see if a form of voluntary compliance arises from these new rules. I won’t notice because I don’t buy audio magazines and hardly ever read reviews online.
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This was my initial impression at midnight on Friday evening when I discovered the regulation.
After reading the entire 163 page release and working with the regulation all day yesterday I believe that the "particular sentiment" element of the prohibition on the purchase of reviews would make it difficult for the FTC to prove a case against manufacturer advertising, accommodation discounts and long-term loans. While the regulation absolutely applies to the high-end audio industry in general, and to professional reviews in particular, it is not the very big deal I thought it was initially.
PF is putting the control (policing) at the correct (incentive) level. If that is rare in the industry, it shouldn't be. It is simple and specific. Thanks for pointing it out.I am copying PYP's post on the "What is a Reviewer" thread to this thread because he is discussing the topic raised here and I do not want to turn that other thread into this one.
I agree that disclosure helps the industry.
In large part disclosure is out there but there are not neon arrows pointing at it. And I don't think it is everywhere. I can describe it for the site that publishes my reviews, Positive Feedback (PF)
First, if you click on a reviewers name for each review of his you will see a list or description of his equipment. That list identifies which components are long term loans. (I don't have any.)
Discounts, as you call them, I take to mean components purchased via industry accommodation. If you are a member of the audio industry (as reviewers are) you can request a purchase from another industry member at a cost lower than msrp. Often manufacturers and distributors accommodate the request (as they make use of this themselves) soley at their discretion but not all do. It is not limited to review components. An accommodation purchase may not be resold until a fixed time has past -- that time is often specified by the manufacturer and is a condition of any purchase.
This practice is not unique to audio. In the audio industry it is heavily regulated. Every publisher I've written for requires explicit permission be granted to make an accommodation purchase and that fact is disclosed by most publishers. No reviewer that I know discloses components made via industry accommodation.
Publishers are invested in honesty and have no desire to seek ruin from scandal caused by a reviewer. Reviewers who engage in unethical practices get fired -- at least for the publishers I've been with.
PF makes public their rules for reviewers. Here are examples with links to full text.
Ethical Principles and Guidelines for Members of the Positive Feedback CommunityEditorial Philosophy - Positive Feedback
Positive Feedback is first and foremost a community, composed of writers and creative persons from around the world. Positive Feedback is an ongoing "work in progress," chronicling the efforts of audiophile listeners, reviewers, designers, manufacturers, distributors, and humorists to explore...
Number 5: All "accommodation pricing" transactions involving review gear are to be cleared by either yours truly or Dave Clark, personally. NO EQUIPMENT IS TO BE PURCHASED VIA "ACCOMMODATION TO POSITIVE FEEDBACK WRITERS/EDITORS" WITHOUT EITHER DAVE CLARK'S OR MY EXPRESS APPROVAL. ...
Number 6: THERE ARE NO QUID PRO QUO'S OF FAVORABLE REVIEWS IN EXCHANGE FOR ANY CONSIDERATION AT POSITIVE FEEDBACK .
You will NOT promise a favorable review in exchange for anything. Ever.
You do, and you're gone; it'll be my boot chasing your hindmost parts out the door.
Review Process Disclaimer and Policy - Positive Feedback
Revised 2023 Positive Feedback (hereinafter PF) is a review journal and creative forum for audio and video equipment, recordings, accessories, and anything else related to the audio and video arts. We are here to educate and entertain our readers, who trust us to provide them with our...
As with most endeavors, there is no overarching set of rules that governs the audio industry or audio publications specifically. I believe it better for audio and other industries to self-regulate than receive dictates from centralized government. That said there are free associations of publishers who agree to common principles.
The internet is another matter. The wild west. Influencers try to build the number of followers. One often sees influencers with less experience than a seasoned hobbyist. I don't think they are purposely misleading anyone, just asking viewers to watch them learn on the job. Unfortunately, they don't actually help beginners understand the basics. But perhaps a lot of this is just a consensual tweaking of the envy gland.
Given how poorly reviewers are paid, if accomodation pricing wasn't available I imagine the number of reviews would decrease, perhaps materially. So I happily accept this as part of the "game". And most reviewers who do purchase the gear are very clear that they have because they mistakenly believe that it is the ultimate positive testimonial. In fact, it just means it was right for the reviewer and his tastes/system/room.
I'm with you on this.
Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials
The Federal Trade Commission today announced a final rulewww.ftc.gov
This is about reviews generally and does not 'target' audiophile reviews.
I never heard of "cecritic.com". On the surface they are anonymous. They don't say who is funding them, but they do sell advertising. Although they are a political organization, I have no problem with a statement of rules from the FTC. I suggest relying on official FTC communication rather than the heavily editorialized account on the cecritic.com web site.
The FTC Is Not Targeting "Audiophile Reviews" - Twittering Machines
Michael Lavorgna's Twittering Machines: HiFi with a twisttwitteringmachines.com
I don't, because the established reviewing community of authors is basically honest. I say ''established reviewing community of authors' because there are so many Web sites popping up that publish what they claim are audio reviews.
It is not a perfect world and there always will be charlatans. Readers have an obligation to know what they are reading.
I see it as something else. Someone got mad about something and created some wording and pushed it up through channels to get it to the place it is. It takes a lot of effort, influence and money to get a gov agency to create a law. More interesting would be to know who started it all and who is backing this law.
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