Beginning January 1, 2014, websites and online service operators that collect consumers’ personally identifiable information will likely be forced to update their privacy policies to comply with a new law in California. Existing California law requires website and online service operators that collect personally identifiable information such as names, addresses, or social security numbers, to post privacy policies on their websites. Recently signed into law by the Governor of California, AB 370, “An Act to Amend Section 22575 of the Business and Professions Code, Relating to Consumers” will require website operators to add a section to privacy policies disclosing how they respond to “do not track” signals or other mechanisms that provide consumers a choice regarding the collection of personally identifiable information.
Companies are advised to thoroughly investigate the companies they hire to manage their online reputations and reviews to ensure that only truthful and accurate reviews and comments from actual consumers are posted online. A company that does not thoroughly investigate the companies they use could find themselves in violation of the Federal Trade Commission’s (FTC) Guides Concerning the Use of Endorsements and Testimonials in Advertising (the 'Guides'). The Guides set forth the principles that the FTC uses when evaluating testimonials and endorsements.
The FTC and other regulators recognize that consumer endorsements and testimonials are a powerful selling tool for businesses and that some companies are exploiting that by writing and posting fake online reviews. Recent studies have estimated that almost 20% of Yelp reviews are fake or suspicious and filtered by Yelp’s fraud algorithm. To combat these tactics, regulators are investigating and taking action.
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