Daily Dicta: Who Knew? Selling Social Media Followers Is Now a Federal Offense
Pro tip: Don't hire a lawyer based on how many Twitter followers they have. You're welcome.
October 22, 2019 at 01:04 AM
4 minute read
There were surprises within surprises when the Federal Trade Commission on Monday announced its first-ever suit against a company for selling fake social media followers on platforms including Twitter, YouTube and LinkedIn.
First, who even knew that was illegal? Pathetic, sure. But against the law?
Second, the FTC revealed that it wasn't just the usual suspects like athletes and musicians who bought fake Twitter followers from Florida-based Devumi and related companies. The customers also included law firm partners.
What?!
Words cannot express my sadness that no names were named.
According to the FTC's complaint filed in U.S. District Court for the Southern District of Florida, "Indicators of social media influence are important metrics that businesses and individuals use in making hiring, investing, purchasing, listening, and viewing decisions. If these metrics are misleading because they are faked, that could induce consumers to make less preferred choices."
(Pro tip: Don't hire a lawyer based on how many Twitter followers they have. You're welcome.)
The FTC reasons that now-defunct Devumi and its owner German Calas, Jr. "provided such users of social media platforms with the means and instrumentalities for the commission of deceptive acts or practices. Therefore, defendants' acts or practices … constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act."
Oh Section 5 of the FTC Act, what won't you stretch to cover? If the statute was a superhero, it would definitely be Elastigirl. Which is possibly the nerdiest sentence any person has ever written, but I'm standing by it.
Alas, Calas and his company opted to settle rather than fight. The proposed court order bans the defendants from selling social media influence and imposes a $2.5 million penalty—the amount the FTC says Calas was paid by Devumi. But based on his financial representations to the commission, he's only on the hook for $250,000.
Calas and Devumi are represented by Pryor Cashman partner Jeffrey Alberts, who did not respond to a request for comment.
The FTC suit follows an action by New York Attorney General's office, which wrangled a $50,000 settlement from Calas and Devumi in January in the first-ever state level case for selling social media followers.
The FTC on Monday also announced a second settlement involving deceptive use of social media—though the action is not likely to strike terror in many hearts.
The FTC went after Texas-based Sunday Riley Skincare for posting fake reviews of its products on the Sephora.com website.
Sephora got suspicious of all the glowing testimonials coming from the same IP address and removed the reviews penned by Sunday Riley employees.
According to the FTC, Sunday Riley then got an Express VPN account to hide its IP address and location.
The FTC administrative complaint quotes from a July 2016 email that the owner wrote to her staff directing each of them to "create three accounts on Sephora.com, registered as … different identities." She also included step-by-step instructions for setting up new personas and using a VPN to hide their identities.
This strikes me as blatantly deceptive conduct, but the FTC declined to impose any monetary penalty. Instead, the defendants merely agreed not to make "any misrepresentation, expressly or by implication, about the status of any endorser or person providing a review of the product."
Ooh ouch (said no one).
Sunday Riley was represented by Behnam Dayanim of Paul Hastings, who did not immediately respond to a request for comment.
FTC Commissioners Rohit Chopra and Rebecca Kelly Slaughter, both Democrats, voted against accepting the deal, objecting to its "minimal sanctions."
"When fake reviews pollute the internet, it hurts our entire digital economy. But after an executive ordered employees to lie online, the @FTC settled the case for no consumer refunds, no forfeiture of profits, and no admission of wrongdoing. I voted no," tweeted Chopra—who has 4,244 followers, presumably all legitimately acquired.
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