Apple iTunes users can rest a little easier, now that the Federal Trade Commission has settled with a public relations firm accused of posting fake customer reviews for mobile gaming apps.
The original FTC complaint accused California-based Reverb Communications of posting iTunes Store reviews that seemed to come from ordinary game players.
"Reverb and [owner Tracie] Snitker did not disclose that they were hired to promote the games and that they often received a percentage of the sales," reads the FTC's Aug. 26 statement paraphrasing its complaint. "These facts would have been relevant to consumers who were evaluating the endorsement and deciding whether to buy the gaming applications."
Under the terms of settlement between the FTC and Reverb, the latter will need to remove any previously posted endorsements of mobile games and refrain from making future endorsement or user claims without disclosing any "relevant connections."
However, the FTC seems to have refrained from fining Reverb, a punishment within its power.
"Companies, including public relations firms involved in online marketing, need to abide by long-held principles of truth in advertising," Mary Engle, director of the FTC's Division of Advertising Practices, wrote in the statement posted on the FTC's Website. "Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers."
Reverb issued an official response of its own.
"Rather than continuing to spend time and money arguing," reads the company's widely circulated statement, "and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion because as the FTC states: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.'"
The popularity of Apple's App Store, and developers' fervor for a bestselling app, has led to its share of controversy over the past few months. In December 2009, Apple pulled more than 1,000 applications from the store after reports of a developer posting fake positive reviews. That developer, Molinker, denied the charges leveled against it by a blogger, but was apparently unable to persuade Apple to reinstate the apps.
In a research note around that time, analysis firm IDC predicted that the App Store would grow to 300,000 apps by the end of 2010. That seems to have increased pressure on Apple to weed out developers who flood the store with useless or fraudulent applications, and to pull any apps that cause a public uproar over good taste or decency.
However, Apple's zealousness has led to controversies of its own. In April, the company asked a Pulitzer Prize-winning cartoonist to resubmit an iPhone app previously rejected because of its satirical nature. Some third-party developers have also questioned why their apps were deleted while others with similar content have been allowed to remain.