The Southern District of California has just issued an interesting Lanham Act decision that addresses product reviews and affiliate relationships.
The plaintiff, GOLO, owns and sells a weight loss program. The program promotes weight loss with dietary modification, exercise, and nutraceutical supplementation.
The defendants operate (among other sites) a product review website, SupplementPolice.com which purports to provide "honesty and transparency to the world of online reviews" through "detailed reviews of popular products" such as nutritional supplements. Supplement Police also claims that it provides "intelligent" reviews of such products from real customers, without any bias or favoritism, and claims that it doesn't currently accept affiliate income from any company in exchange for favorable reviews.
However, according to GOLO, Supplement Police actually promotes and links to products that the defendants -- who compete with GOLO in the diet and weight loss industry -- are affiliated with, specifically SilaLive, a "health supplement combining organic silica and pure food grade diatomaceous earth designed specifically to health the human body by safely flushing and eliminating harmful toxins and excess waste." Supplement Police provides multiple links to the SilaLive website, where consumers can purchase the supplement.
According to the plaintiff, Supplement Police readers are not informed that defendants are affiliated with SilaLive even though the site includes reviews of the product. Moreover, plaintiff claims, Supplement Police's review of SilaLive contains false statements about SilaLive's purported benefits and its review of GOLO includes content that "would cause readers to doubt GOLO's effectiveness and/or decide not to purchase GOLO."
In its motion to dismiss the complaint, defendant argued (among other things) that its review of the GOLO products did not constitute actionable commercial speech for purposes of a Lanham Act claim. As noted by the Court, the Lanham Act does not apply to reviews of consumer products; however, if a review also contains a "commercial product promotion, [it] may fall under the Lanham Act."
GOLO alleged that the review is, in fact, an advertisement because it contains false representations that are meant to discourage use of GOLO products and to encourage the purchase of defendants' products instead. In making this claim, plaintiff alleged a number of pertinent facts: inaccurate and misleading statements about GOLO products; the fact that the review is surrounded by advertisements and links to products and websites in direct competition with GOLO; the fact that there are affiliate links to competitive products; the very positive review of defendant's own competitive product, SilvaLive; and the failure of Supplement Police to disclose the identity of its owners and its efforts to actively hide its association with SilaLive.
The court, citing an earlier case, found that "Plaintiff is correct that liability can arise under the Lanham Act if websites purporting to offer reviews are in reality stealth operations intended to disparage a competitor's product while posing as a neutral third party." Thus, the court held that the plaintiff had sufficiently alleged that the review of GOLO on SupplementPolice.com constitutes commercial speech subject to the Lanham Act and it denied defendants' motion to dismiss the Lanham Act causes of action.
Would affiliate links always transform a product review into commercial speech? Not necessarily. But, here, the combination of allegedly false statements about the plaintiff's product in the review, coupled with the promotion of defendant's own product, and the lack of transparency about the fact that the product the site touted was the defendant's own, transformed protected editorial speech into commercial speech.
GOLO, LLC, v. HIGHER HEALTH NETWORK, LLC, and TROY SHANKS, Defendants, Case No.: 3:18-cv-2434-GPC-MSB, 2019 WL 446251 (S.D. California)
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