Two FTC commissioners say the Sunday Riley settlement, which involved no return of gains, despite strong evidence of wrongdoing, may usher in more review fraud
Paris Martineau / Wired : Tweets: @wired Tweets: @wired : Online, fake reviews have reached epidemic proportions and these FTC commissioners know exactly who to blame: their own agency. https://www.wired.com/...
Context & Ripple Effects
The criticism lands days after Sunday Riley and click-farm Devumi both settled FTC charges over fake followers and reviews — a week that put the agency's review-fraud docket on display. It also echoes an earlier pattern: in February, the FTC settled its first fake paid Amazon reviews case with a supplement maker while suspending most of a $12.8M judgment.
The significance here is internal dissent going public: two commissioners arguing their own agency left strong evidence of wrongdoing unremedied. That split matters because the corpus shows the FTC later changing course — ordering a supplement maker to pay $600K over hijacked Amazon reviews and proposing per-view fines for bought reviews.
First-order effects
- Sunday Riley keeps the commercial benefit of its fake reviews — no disgorgement means the settlement imposed essentially no financial consequence for conduct the evidence supported.
- The two dissenting commissioners turn the deal into a public signal that FTC enforcement on review fraud is inconsistent, weakening whatever deterrent effect the Devumi and Sunday Riley filings were meant to have.
Second-order effects
- Rival cosmetics and consumer brands face distorted incentives: if the cost of getting caught posting fake reviews approaches zero, the rational move under this precedent is to try it — which is exactly the escalation the commissioners warn about.
- Platforms like Amazon absorb more of the policing burden, as seen in the FTC's later hijacked-reviews case targeting misleadingly merged product pages rather than relying on brand-side compliance.
Third-order effects
- If weak no-fault settlements keep undermining deterrence, expect the FTC to shift authority from discretionary case-by-case deals to codified rules — consistent with its later proposal to fine companies up to $50K each time a customer sees a purchased fake review.
- The longer-run structure: review integrity becomes a regulated compliance domain with defined monetary exposure, replacing the era where a documented offender could settle without returning gains.
The trend: FTC review-fraud enforcement is moving from no-cost discretionary settlements toward codified per-violation penalties, driven by internal criticism that lenient deals invite more fraud.