April 10, 2023
The Federal Trade Commission (FTC or Commission) announced on Monday that it has approved a final order in a case that involved allegedly misleading use of reviews of products sold on Amazon.
The final agreement orders The Bountiful Company, a Bohemia, N.Y.-based manufacturer of supplements under the brand names of Nature’s Bounty, Sundown and others, to pay $600,000 in restitution and refrain from similar actions in the future.
Playing the variation game
The complaint hinged on Bountiful’s alleged misuse of an Amazon feature that allows marketers to create so-called “variation” relationships between products.
This feature allows marketers to create links to similar product pages for different colors of a T-shirt, or different flavors of a beverage, for example, making it easier for consumers to compare these slightly different offerings.
The key is the degree to which the products on the variation pages resemble the original. If the relationships are very close (such as a different shirt color), the reviews of the product by consumers can legitimately apply to both. To do otherwise might be construed as misleading, according to FTC guidance.
The FTC commissioners found the new products linked in this fashion by Bountiful (which is now owned by Nestlé) were different formulations, and the company was in effect “gaming” the system by allowing different products to tag on with the high-ranking reviews of some of Bountiful’s best sellers.
Poor sellers riding on coattails of more popular products
The FTC complaint alleged consumers would thereby be misled into thinking variation products were also receiving high-ranking reviews.
The complaint details how the company deliberately tacked poor-selling products with low-ranking scores onto the pages of high-selling products.
The Commission said the Bountiful case marks the first time it has pursued an enforcement action over so-called “review hijacking.”
The complaint cited some internal company emails as proof of the practice.
One email, which was authored by an unnamed ecommerce director, said the company “got creative” by creating “variations with some of our [new products] to try and ramp them faster as they were NOT selling and we wanted to give them a little boost in R[atings]&R[eviews] to gain visibility and allow them to also borrow the ‘amazon choice’ badge and best seller badge, which worked.”
For example, Bountiful requested Amazon combine two gummy products— Stress Comfort Mood Booster Gummies and Nature’s Bounty Stress Comfort Peace of Mind Stress Relief Gummies—with three existing stress-related products in capsule and tablet form. The stress-related products were marketed as a combined Stress Comfort category.
The gummies were not particularly popular with consumers after they launched, according to the ecommerce executive’s emails, achieving only a 3.2 rating. But Bountiful applied to the entire combined category the average 4.5 ratings of the well-received tablet and capsule products (based on ashwagandha, valerian and other botanical ingredients), according to the Commission.
The executive’s email said sales for the laggard products “spiked the second we variated the pages and they continue to grow.”
Bountiful, the FTC complaint alleged, had created variation pages for unrelated products on numerous occasions in 2020 and 2021.
The final vote on March 28 to approve the consent decree was a unanimous 4-0.
In consenting to the decree, The Bountiful Company neither admitted to nor denied any of the specific allegations.
Question of fairness?
In an interview, attorney Marc Ullman, of counsel with the firm Rivkin Radler, said, “I think it’s incredibly deceptive. I could see how it would be something the Commission would take extreme exception to.”
Ullman also questioned the basic fairness of how Amazon dealt with certain online sellers.
“It’s shocking to me that Amazon allowed this to happen,” Ullman said. “I have had clients who have made minor formulation changes and Amazon has required them to get a new product number and start over with their reviews. How is it then that The Bountiful Company was allowed to reformulate products and keep their reviews?”
Amazon did not respond to a request for comment in time for publication.
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