Sunday Riley would face the threat of civil penalties if it engaged in this behavior again. The company did not have to provide consumer redress, in part because it would be difficult to calculate how many purchases were driven by the fake reviews.
“An order that binds a company and its C.E.O. for 20 years, imposing reputational costs and subjecting Ms. Riley and her company to the threat of significant civil penalties, sends a strong signal to the market,” Noah Joshua Phillips, an F.T.C. commissioner, said in an email to The Times.
E-commerce sellers, from legitimate brands to counterfeiters, can also buy good reviews through dodgy websites, online forums and Facebook groups. There are services that connect sellers with consumers who are willing to buy and rate products online for reimbursement. Positive ratings not only drive sales but can increase the odds that products appear high in search results.
“The incentives are incredibly high for brands to create fake reviews or incentivize reviews,” said John LeBaron, chief revenue officer of Pattern, a consulting firm that works with brands on Amazon. “Many brands I’ve spoken with say: ‘I feel like if I don’t do this, then I’m not staying level with my competition, I’m literally just falling behind.’”
Volume can also make a big difference. The likelihood that consumers who read reviews will buy a product can triple based on the number of reviews it has, according to research by Mr. Malthouse, the Northwestern professor, and Yorgos Askalidis, a data scientist, in 2016.
Companies like Fakespot specialize in detecting fake or paid reviews, particularly those posted by humans. Their systems look at language patterns, account creation dates, the types of items that certain accounts are reviewing, and more.
“Amazon is removing fake reviews, but not at the scale to remove every single fake review on the platform,” Mr. Khalifah said.