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False advertising occurs when an ad crosses the line and makes claims that mislead consumers. There are three main types of false advertising. In general terms they are:
Generally, consumers and competitors are the ones that report claims of false advertising to the FTC. The FTC can decide to take action either informally or through formal means. Formal methods include:
Astroturfing is an example of false advertisement that has been making the news recently. The New York Attorney General’s Office recently conducted an investigation that resulted in more 15 businesses being fined for using SEO firms to post false reviews on sites such as Yelp. Not only is this false advertising but reviewers were also being compensated for their fake reviews, a practice which is in direct violation of FTC rules.
You may be wondering why this is so bad. What’s the big deal with a few fake reviews, right? Well, arguably just a few fraudulent reviews can hurt competitors. Here’s how this would work: let’s say that you’re visiting a new city and looking for a place to eat. After checking restaurant reviews on Google for those located nearest you, which are you most likely to choose- the place with 3 stars and average (honest) reviews or the place with 4 stars and rave reviews? Let’s be honest, the prospect of food poisoning is never a great one, especially not when you’re far away from home. Thus, the local competitor with a less than stellar online rating loses out on potential business.
Another example involves the search engine Bing. The validity of Bing’s cutesy “Bing it On,” challenge has been called into question by many, including Yale professor Ian Ayers. Professor Ayers duplicated the study conducted in the “Bing it On” challenge and found that Google’s results actually outrank Bing’s, with similar conclusions being reached by others taking the challenge themselves.
There are a few rules of thumb to follow when it comes to avoiding having claims of false advertisement being brought against you. This list isn’t all-inclusive, but it does cover some general points.
For me, honesty is the best policy in order to avoid the possible ramifications for false advertisement. If you’re having second thoughts about whether or not you’ve crossed into the territory of false advertising with your ad you may want to step back and ask yourself – should I be that close to the line to begin with?