PR Agency Used by Harmonix Hit by Federal Trade Commission for iTunes Review Controversy

By Xav de Matos, Aug 27, 2010 7:45am PDT Reverb Communications, the public relations agency used by Harmonix, MTV Games, 505 Games and CDV Software, has decided to settle US Federal Trade Commission charges that the company posted favorable iTunes reviews of the products it was paid to promote.

According to an FTC statement, the company posted reviews of games developed by their clients using "account names that gave readers the impression the reviewers were written by disinterested consumers." Terms of the ruling state that Reverb must remove all questionable reviews and disclose the company's connection to the products in the future.

In a statement sent to Kotaku, Reverb Communications boss Tracie Snitker claimed the allegations were "old," and that "issue" was specific to a handful of "small, independently developed iPhone apps that several team members downloaded onto their personal iPhones in their own time using their own money and accounts, a right and privilege afforded to every iPhone and iTouch use."

According to the FTC news release regarding this matter stated that "Reverb and Snitker did not disclose that they were hired to promote the games and that they often received a percentage of the sales."

In response to the ruling, FTC's director of advertising practices, Mary Engle, said that "companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising."

Casey Lynch, the director of public relations and business development for Reverb Communications, said that the company decided to settle when it "became apparent that [the FTC and Reverb] would never agree on the facts of the situation." Lynch called the matter "frivolous" and said the company opted to end the situation rather than spend "time and money arguing, and laying off employees."

Of particular note, the FTC made clear that this situation, described as an administrative complaint, is not the same as finding that a company or individual has violated the law, stating that "the consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation."

Reverb added the following statement to the comments of this story:
During discussions with the FTC, it became apparent that we would never agree on the facts of the situation. Rather than continuing to spend time and money arguing, 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.'

This issue was specific to a handful of small, independently developed iPhone apps that several team members downloaded onto their personal iPhones in their own time using their own money and accounts, a right and privilege afforded to every iPhone and iTouch user. Any iTunes user will understand that each time a product is purchased you are allowed to post one comment per product. Seven out of our 16 employees purchased games which Reverb had been working on and to this the FTC dedicated an investigation. These posts were neither mandated by Reverb nor connected to our policies. Bottom line, these allegations are old, this situation was settled awhile ago and had nothing to do with the clients that many outlets have been reporting. The FTC has continuously made statements that the reviews are "fake reviews" something we question; if a person plays the game and posts one review based on their own opinion about the game should that be constituted as "fake" The FTC should evaluate if personal posts by these employees justifies this type of time, money and investigation. It's become apparent to Reverb that this disagreement with the FTC is being used to communicate their new posting policy. We stand by the statement from the FTC that: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.'

Click here to comment...

Comments

4 Threads | 12 Comments


  • Reverb Statement:
    During discussions with the FTC, it became apparent that we would never agree on the facts of the situation. Rather than continuing to spend time and money arguing, 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.'

    This issue was specific to a handful of small, independently developed iPhone apps that several team members downloaded onto their personal iPhones in their own time using their own money and accounts, a right and privilege afforded to every iPhone and iTouch user. Any iTunes user will understand that each time a product is purchased you are allowed to post one comment per product. Seven out of our 16 employees purchased games which Reverb had been working on and to this the FTC dedicated an investigation. These posts were neither mandated by Reverb nor connected to our policies. Bottom line, these allegations are old, this situation was settled awhile ago and had nothing to do with the clients that many outlets have been reporting. The FTC has continuously made statements that the reviews are “fake reviews” something we question; if a person plays the game and posts one review based on their own opinion about the game should that be constituted as “fake?” The FTC should evaluate if personal posts by these employees justifies this type of time, money and investigation. It’s become apparent to Reverb that this disagreement with the FTC is being used to communicate their new posting policy. We stand by the statement from the FTC that: 'The consent agreement is for settlement purposes only and does not constitute admission by the respondents of a law violation.'