« Bankruptcy Immigrants | Main | The Bully Model of Consumer Finance and Litigation »

Reputational Sanctions in an Age of Internet Manipulation?

posted by Adam Levitin

A major argument against substantive regulation of industries (including consumer finance) is that the market self-regulates. Bad actors get bad reputations and lose business.  Therefore, there's no need for government to intervene.  

This type of argument involves a significant set of assumptions about how reputational sanctions work for any particular product and about the inability of bad actors to simply rename themselves. Often, these assumptions are unexamined or unwarranted--ideology trumps all--but the development of the Internet as a reputational reference complicates things. 

The Internet provides a tremendous aggregation of reputational feedback, with everything from formal reviews to "XYZsucks.com" sites, etc. But the typical Internet reputational search involves a google search or the like, and the search results are manipulable. Not only can they be manipulated, but there are whole businesses set up to do just that.

Consider this one I stumbled across tonight: www.reputationchanger.com.  The site makes clear that it will just flood out the negative reviews with manufactured positives:

We create a number of online assets such as blogs, minisites, and social media profiles on your behalf.  Once created we boost these digital properties in the search engines. Very quickly these listing populate internet search results and outrank the negatives.

At the end of the online reputation repair campaign, you will effective [sic] control all 10 listings on page 1 of Google, Yahoo, and Bing. 

One of the case studies given is of a direct marketing company that settled an action with the FTC. The Reputation Changer "completely suppressed" the negative listings from page 1 of Google and "repopulated new/positive listings." They will also manipulate google auto suggest for you.  And the site claims that "It is proven that 90% of people do not search past the first search page for any given query." Combine a flood of positives and manipulated auto suggests, and the service sounds like it would be quite effective, if the 90% claim is true.  [Let's see how fast they bury this blog post...]

What are we to make of this reputation manipulation industry? On the one hand there are free speech concerns. And it's not as if the manufactured postings are themselves necessarily false (if they are, that's another matter). It's not so different than hiring a publicist or having a celebrity to pose with a product or say something complimentary about it--that's just adding positive reputational noise.

On the other hand, however, I wonder if this sort of manipulation of reputational sources--flooding the information marketplace with true noise--is in and of itself an unfair and deceptive act or practice. This strikes me as qualitatively different from hiring a celebrity to shill for a product. The celebrity pitch is creating positive noise, but this is really aimed at drowning out negative noise. In other words, the goal of the reputationchanger product is to inhibit the consumer's ability to find out negative information about a product, not just to provide positive information to the consumer.

The UDAP issue aside, these products currently exist. Can we give any serious credence to reputational sanction arguments in such a world? Or do we just have to be honest and say that we don't really care if there isn't a reputational sanction, we just don't like regulation? There was something refreshingly honest about Justice Scalia's astonishing declaration in AT&T v. Concepcion that the contracts of adhesion ship has long sailed, so fundamental contract law issues like meeting of the minds be damned? Maybe we can finally drop the pretense of economics in anti-regulatory arguments.   

 

Comments

Antitrust law might contribute a useful category here: "raising rivals' costs." Although of course the XYZSucks sites are not rivals of XYZ. On the third hand, the harm to consumer welfare is similar.

SEO is a tricky game. It isn't a First Amendment issue since Google is a private company. Besides Google - all SEO is geared towards Google first - isn't suppressing speech it is organizing it based on a content neutral algorithim that judges all sites equally. Reputation managers are relying on people not to search past the first page of results, which is the searchers' fault not the search engines.

I do all of my own marketing for my bankruptcy practice. Over the last few years, I've become a semi-pro SEO guy. Sites like Reputation.com don't tell their customers that they can only optimize around a fairly narrowly defined set of keywords. Reputation.com, and its ilk, can't hide information from long tail searches, i.e. a search that uses an uncommon typically 3+ word search query.

Also, Google cracks down on a lot of these reputation management techniques. Both the Panda and Penguin updates to the Google algorithm make these mini-sites and blogs less valuable. My understanding of these techniques is that they rely on links from content farms, duplicate content, and don't get updated frequently. This will ultimately deprecate those sites that are used to manipulate search queries for a bank.

The best way to regulate it is a blog like this one. If you create a link with the hypertext FTC sanctions XYZ Inc. that increases the likelihood that the linked story will appear in a search about XYZ Inc. Also, any link from this blog carries a lot of weight, because Credit Slips is a fairly powerful PR 6 site with frequent content updates. The more content that consumer advocates create - particularly with relevant anchor text to XYZ Inc. - the better the chances that the FTC decision will turn up instead of a spammy mini-site. Google is fairly democratic, in that the better fresher content gets more links, and therefore ranks higher. Reputation managers rely on two things to suppress these stories 1) they create a large volume of content, and 2) they assume that few people will write targeted blog posts on a high quality site.

unexamined or unwarranted--ideology trumps all--but the development of the Internet as a reputational reference complicates things.

The comments to this entry are closed.

Contributors

Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

News Feed

Categories

Bankr-L

  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

OTHER STUFF

Powered by TypePad