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FTC Puts Hundreds of Businesses on Notice about Fake Reviews and Other Misleading Endorsements
"Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "Advertisers will pay a price if they engage in these deceptive practices."
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FTC Puts Hundreds of Businesses on Notice about Fake Reviews and Other Misleading Endorsements
"Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "Advertisers will pay a price if they engage in these deceptive practices."
80% of its staff are Amazon employees The firm has around 6,000 retail locations
Mechanical Turk" program, which uses its Mechanical Turk platform to provide jobs to
We study the market for fake product reviews on Amazon.com. These reviews are purchased in large private internet groups on Facebook and other sites. We hand-collect data on these markets to characterize the types of products that buy fake reviews and then collect large amounts of data on the ratings and reviews posted on Amazon for these products, as well as their sales rank, advertising, and pricing behavior. We use this data to assess the costs and benefits of fake reviews to sellers and evaluate the degree to which they harm consumers. The theoretical literature on review fraud shows conditions when they harm consumers and conditions where they function as simply another type of advertising. Using detailed data on product outcomes before and after they buy fake reviews we can directly determine if these are low-quality products using fake reviews to deceive and harm consumers or if they are high-quality products that solicit reviews to establish reputations. We find that a wide array of products purchase fake reviews, including products with many reviews and high average ratings. Buying fake reviews on Facebook leads to a significant increase in average rating and sales rank, but the effect disappears after roughly one month. After firms stop buying fake reviews their average ratings fall significantly and the share of one-star reviews increases significantly, indicating fake reviews are mostly used by low quality products and are deceiving and harming consumers. Finally, we observe that Amazon deletes large numbers of reviews and we document their deletion policy.does kohl s make money on amazon returnshow to make money on instagram
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