FTC Cracks Down on Reviewers

[Ron Resnick]

@Ron Resnick , in your experience did you see instances where regulations were re-defined in practice (not modified in writing) by both parties after a little experience with implementation? What I've observed over time, is that when the pendulum swings there can be posturing, but the practical day-to-day implementation brings the pendulum nearer to equilibrium. In other words, practice can point out impracticalities with procedures as written. That doesn't mean everything stops.

No, I did not see this. Both the regulators and the regulated need to be clear about the "rules of the road." Everybody needs to be able to look at the same printed rule.

It would sow great confusion if some market participants had one, informally-modified understanding of the rules, and other market participants had a different understanding of the rules based on the actual text of the rules.

Regulated companies need to have comfort that the advice they are receiving from the regulators is in writing and can be referred to by both future regulators and by future employees at the regulated companies. It wouldn't work if over time regulations became modified by informal practice or by lore.

I agree with the equilibrium and pendulum swinging concepts. Sometimes regulators do go too far and in the course of practice and application of the rules they back off a little bit. But this typically would be effected and documented by "no action" letters, and not by informal, specialized understandings. "No action" letters are a great way for the regulator to communicate regulatory relief to all market participants simultaneously.

 

[Rt66indierock]

In my world, tax we have Revenue Procedures, some updated annually and Announcements.

 

[PYP]

I agree with the equilibrium and pendulum swinging concepts. Sometimes regulators do go too far and in the course of practice and application of the rules they back off a little bit. But this typically would be effected and documented by "no action" letters, and not by informal, specialized understandings. "No action" letters are a great way for the regulator to communicate regulatory relief to all market participants simultaneously.

Thanks for the clarification. Was trying to understand how the practical matters of "lived experience" get implemented.

 

[PYP]

X ( Optimus ) will be reviewer / designer / accountant / regulator / moderator ... president all at the same time

sounds great! I hope X provides a diagnostic for my setup so that I know where the different forms of noise are coming from and how to mitigate them.

Let's be happy for now. Once X makes us batteries, we will no longer remember these good times. On the other hand, audiophile batteries will receive 24/7 surround sound based upon the very best low power set + horns distortion profile. Some here will then never take the red [non-political meaning of red, as in the color red] pill.

 

[Synaxis]

Interesting reading what the people on the California Costal Commissions said in their speeches (I read their actual speeches) for reasons denying Musk the right to launch more rockets after his spectacular success with the come-back of the rocker earlier this week.

It certainly gives credence to the people who've voiced concerns on this thread about rampant abuse regardless of what the government bureaucrats are supposed to be focusing on or not.

I'm sure when they created the CCC people never thought that the commission would so clearly violate the law and veer from their authority and focus yet here we are....

Once you let the genie out of the bottle, there is no putting it back in.

 

[Tuckers]

I can see how this regulation could be birthed from the increased frictionless environment of social media: i.e. Tiktok, Instagram etc., where reviews can be created and viewed by millions without the oversight of a media company or other guide rails of traditional journalism. I think it definitely applies to audio reviews just as well as Teslas. I don't as a consumer have a problem with these regulations overall. It is just coloring in things that have been left to editorial committees. As a nascent reviewer, I like having clear rules around ethics. I think the FTC will use this for large actions like the FTX enforcement etc.

I am not clear on how these rules will affect civil law. Can I bring a suit against a company based on the perceived violation of these rules and win?

 

[Ron Resnick]

Can I bring a suit against a company based on the perceived violation of these rules and win?

No. A regulation promulgated by an administrative agency of the executive branch does not create directly a private right of action.

 

[Tuckers]

No. A regulation promulgated by an administrative agency of the executive branch does not create directly a private right of action

With this, I see this regulation as essentially unenforceable in the audio industry then. There is no way the FTC has bandwidth or budget to control this. Also, this is USA only, and this industry is entirely international.

 

[Ron Resnick]

Are manufacturers, distributors or dealers paying high-end audio YouTube influencers at audio shows to video and comment positively on the exhibit room or the components of the stereo system?

This activity probably is now illegal!

"It is an unfair or deceptive act or practice and a violation . . . for a business to provide compensation . . . conditioned . . . by implication on . . . the . . . creation of consumer reviews expressing a particular sentiment, whether positive or negative, regarding the product . . . or business that is the subject of the review."

§ 465.4 Buying Positive or Negative Consumer Reviews of 16 CFR 456: Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (August 14, 2024)

 

[LostHisMarbles]

glad i'm no longer any part of it.

The very reason i retired earlier than i could..would have.
Only difference being that i did High End audio equipment and peripherals/accessories rather than cars.

You will forgive me however, or not, it's fine, when i say publicly that i detect a bit of duplicity, or at best oversimplifying in your overall statement. Given you're a co-founder of this place that is.
In the era of the internet many reviewers, even if reviewers for all the wrong reasons, started as simple participators / enthusiasts.
i) No one taught them, let alone taught well
ii) When certain.. satellites (that you mentioned) and multiple private individuals (that you failed to mention) begun poisoning the well, some folks took example and started doing likewise, seeing profit to be made, rather than abstaining from following.

Like say allowing people to shill their products long as they paid a dime or too. Yeah? If we wanna be a touch honest about this all? Because it has affected things too this, greatly in fact.
It is certainly one's "right" to do many things, legally capitalising on something one of them. It is quite another to exercise that right when the ground is morally ambiguous.

When we allowed, first in printed media and then in the internet, all kinds of "manufacturers" and "designers" to shill at will long as they paid (Member of Trade, Industry "Expert", "Dealer" [that just happens to be a member here, oh sure, i mean, like, total coincidence!] et al), can we really be concerned when more follow our example?
Lest of course, like me, we never did follow such a road.

For all the rest, do kindly allow a moment or two of inward looking? Whomsoever you, they, may be.

Reviewers don't fall from trees.
Nor do their practices.

And my apologies, but it's a subject very dear to me; can say hand to heart i was one of the precious few that didn't advertise, inject into groups or forums to "announce" or "merely" ""inform"", that didn't ever just "happen" to "mention" a product or two, that never cultivated friendships/acquaintances so as to passively present product.
Precious, precious few of you all making even one dime in this field can claim likewise. And you caused damage in doing so. Damage.

Does media (forums included) cost money? Sure. But then again, who told you to open one? Close it and say i did it right, pay it entirely from your pocket and say again i did it right, or complain not at all. Because said damage? All, but all the big forums had and continue to have a part in it. Reviewers not falling from trees and all that.
I used to complain about Stereophile and their ilk (if only i could name names and events..) and i now see with regret how near infinitely worse the internet is at this.
And you (plural, the..for.. certain forum owners) have a piece of the blame in this.

Glad like you i'm not part of it, but annoyed as hell it's everywhere and i'm forced to stomach and wade through it, like it or not.

 

[tima]

The very reason i retired earlier than i could..would have.
Only difference being that i did High End audio equipment and peripherals/accessories rather than cars.

You will forgive me however, or not, it's fine, when i say publicly that i detect a bit of duplicity, or at best oversimplifying in your overall statement. Given you're a co-founder of this place that is.
In the era of the internet many reviewers, even if reviewers for all the wrong reasons, started as simple participators / enthusiasts.
i) No one taught them, let alone taught well
ii) When certain.. satellites (that you mentioned) and multiple private individuals (that you failed to mention) begun poisoning the well, some folks took example and started doing likewise, seeing profit to be made, rather than abstaining from following.

Like say allowing people to shill their products long as they paid a dime or too. Yeah? If we wanna be a touch honest about this all? Because it has affected things too this, greatly in fact.
It is certainly one's "right" to do many things, legally capitalising on something one of them. It is quite another to exercise that right when the ground is morally ambiguous.

When we allowed, first in printed media and then in the internet, all kinds of "manufacturers" and "designers" to shill at will long as they paid (Member of Trade, Industry "Expert", "Dealer" [that just happens to be a member here, oh sure, i mean, like, total coincidence!] et al), can we really be concerned when more follow our example?
Lest of course, like me, we never did follow such a road.

For all the rest, do kindly allow a moment or two of inward looking? Whomsoever you, they, may be.

Reviewers don't fall from trees.
Nor do their practices.

And my apologies, but it's a subject very dear to me; can say hand to heart i was one of the precious few that didn't advertise, inject into groups or forums to "announce" or "merely" ""inform"", that didn't ever just "happen" to "mention" a product or two, that never cultivated friendships/acquaintances so as to passively present product.
Precious, precious few of you all making even one dime in this field can claim likewise. And you caused damage in doing so. Damage.

Does media (forums included) cost money? Sure. But then again, who told you to open one? Close it and say i did it right, pay it entirely from your pocket and say again i did it right, or complain not at all. Because said damage? All, but all the big forums had and continue to have a part in it. Reviewers not falling from trees and all that.
I used to complain about Stereophile and their ilk (if only i could name names and events..) and i now see with regret how near infinitely worse the internet is at this.
And you (plural, the..for.. certain forum owners) have a piece of the blame in this.

Glad like you i'm not part of it, but annoyed as hell it's everywhere and i'm forced to stomach and wade through it, like it or not.

I think its a rant but I have no idea what you just said. This needs some context. Can you say again briefer?

 

[Tuckers]

Are manufacturers, distributors or dealers paying high-end audio YouTube influencers at audio shows to video and comment positively on the exhibit room or the components of the stereo system?

At an audio show in the last year, I was at a new speaker manufacturers room, I listened, I chatted with the manufacturer, and I left the room. I was cornered by a guy with a video setup wanting to ask me about my experience with those speakers. I told them I'm not a consumer, saw that their badge was one of a well known YouTube review channel, and ask them what they were doing. The person (who was not the actual reviewer) said we are doing marketing for this new product. And I talked to them a bit longer. Later, I've seen these speakers in the background of the reviewers video, but thankfully I don't believe they actually reviewed them. My eyes opened about this reviewer, and I now I can clearly see how they favor certain brands over others, seem to have some spin in most of their reviews that come straight from the marketing etc. I trust their opinion a LOT less than I did previous to this experience. I believe they may be violating this new law, and that they are probably not unique in this industry.

 

[Elliot G.]

In some respects I think this regulation actually hits a valid target. While researching on Google a local contractor I discovered that some of the contractor's reviews were completely fake ("posted" by people who didn't exist), and other reviews were from former or current employees or agents (pretending to be unrelated third parties). I suspect this goes on pretty commonly. Under this regulation both of these kinds of deceptions are prohibited.

The FTC eventually will initiate enforcement actions against particular alleged violators to make examples of the application of the regulation. In the meantime a regulation like this has in terrorem value against prospective wrongdoers.

This behavior of asking for reviews and in part putting pressure on to give reviews ( lots of car dealers do this) and having being asked many times by business to fill out review type forms asking for recomendations is very common place. In audio there have been and are people making videos about shows and showrooms that are paid for. This is not a review its a report .If one is paying for a review that is a whole different kettle of fish. The appeal to authority in marketing and advertising has been and always has been disingenous but no one said it was illegal or even immoral. Celebs have been the face of products forever and I would guess that many do not use or truly endorse the products but rather just go paid to say so. This recently happened in the political arena as well, however this may be creepy is it illegal?
I would say that if I went to a credible review outlet and actually paid them a fee to write a positive review that should not be allowed. We are however on a slippery slope with this as discussed in other threads with influence being peddled by Long Term L'oan's, heavily discounted accomodations and "favors" being granted.
The audio Industry has used the review process as marketing for a very long time. IN this area where does advertising and marketing end and the review process begin? I don't have the answer but it is very obvious that we have long time ago reached this area.

I think that complaining about it now is like trying to put the toothpaste back into the tube. Let the buyer beware.

 

[Rt66indierock]

I think its a rant but I have no idea what you just said. This needs some context. Can you say again briefer?

Tim, let me summarize. In Luxury Audio, a 2.8-billion-dollar industry, some of the “marks” are starting to realize they are marks. Worse, the folks considering them marks are self-taught. Worse still these folks have only their self interest in mind when they sell them luxury audio. And they use all forms of media to influence the marks.