Removal of Other Companies' Stealth Marketing (Stema) Articles

Stealth marketing is the act of advertising in a way that consumers do not realize they are being advertised to. It derives from the English word “Stealth”, which means to hide or be secretive. It’s the “stealth” in stealth fighter jets.

Stealth marketing is carried out on platforms such as Amazon customer reviews, other review sites, blogs, and affiliate sites, where it masquerades as neutral criticism or the impressions of ordinary people with no vested interest in the product. It is done by individuals or companies with a vested interest in boosting the product’s ratings. As it involves deceptive practices such as “planting” or “shilling”, it is considered morally wrong. If discovered, it becomes the target of criticism and can often lead to a “flaming” incident on the internet.

Two Common Stealth Marketing Techniques

There are two common patterns in stealth marketing techniques.

1. The ‘Impersonation Type’ where the business operator posts on a word-of-mouth site, but misleads others into believing that a third party has posted it.
2. The ‘Benefit Provision Concealment Type’ where the business operator provides monetary or other economic benefits to a third party to make a post, but does not disclose this fact.

The Japanese Consumer Affairs Agency, in its ‘Issues and Points to Note on Advertising Displays in Internet Consumer Transactions’ dated October 28, 2011, cites examples of issues under the Act against Unjustifiable Premiums and Misleading Representations (Japanese Act against Unjustifiable Premiums and Misleading Representations).

A business operator who runs a store that provides goods or services requests a business operator who acts as a proxy for word-of-mouth postings to write a large number of word-of-mouth postings in the word-of-mouth information corner of the site related to the goods or services they supply. This changes the evaluation on the word-of-mouth site itself, and despite the fact that there were not many favorable evaluations for the goods or services on the word-of-mouth site in the first place, it makes it appear as if the quality and other content of the goods or services being provided are receiving favorable evaluations from a large number of general consumers.

Issues and Points to Note on Advertising Displays in Internet Consumer Transactions under the Act against Unjustifiable Premiums and Misleading Representations

This falls under the above-mentioned ‘Impersonation Type’.

Also, on May 9, 2012 (Heisei 24), a part of the ‘Issues and Points to Note on Advertising Displays in Internet Consumer Transactions’ was revised, and it is stated that the above-mentioned ‘Benefit Provision Concealment Type’ of stealth marketing can also be a problem as an unfair display under the Act against Unjustifiable Premiums and Misleading Representations.

However, stealth marketing cases are not easily eradicated.

Let’s take a look at some stealth marketing cases that have caused problems in Japan in the past.

The Penny Auction Scandal

In December 2012, four individuals from a dating site operating company were arrested on suspicion of fraud for allegedly swindling handling fees from bidders on the penny auction site “World Auction”.

This is a well-known penny auction scandal, and it was through this incident that the term “stealth marketing” became widely known. Stealth marketing was a candidate for the buzzword of the year in that year.

The multiple penny auction sites operated by the arrested individuals initially started with high-value items at low prices such as 0 yen, and the price increased in bidding units from 1 yen to 15 yen. The basic system was introduced as prepaying the site operator in virtual assets for a burden of several tens of yen each time a bid was made, and after winning the auction, the winning bid was paid in virtual assets.

However, the site operators had set up a system where they could not win the auction unless it reached 10 million yen by automatically bidding with fictitious members through BOT. The more bids were made, the more money went to the site operators. Although some low-priced items were exceptionally available for low-price bidding as dummies, such cases accounted for only about 1% of all listings. Furthermore, an analysis of the documents seized in the search of the house revealed that there was no evidence of purchasing the high-priced items listed, and it was clear that there was no intention to hand over the items to the bidders.

It was revealed that they had taken on the public relations of this operator for 300,000 yen a month and posted false advertising articles on their own blog, such as “I got such an expensive item so cheaply!” The names of about 20 celebrities came up, and there are female celebrities who were questioned for violations of the Minor Offenses Act. They didn’t know it was a scam, but there are celebrities who have had no media appearances since then.

This act falls under the category of “profit provision concealment type” stealth marketing.

The Rakuten Market Incident

In March 2015, a large-scale scam involving fake orders and false reviews on Rakuten Market was uncovered. Rakuten claimed that these deceptive practices interfered with their fair service and filed a lawsuit in the Osaka District Court against a system company in Osaka City, demanding approximately 198 million yen in damages.

Rakuten offers a feature called “Everyone’s Review” on its “Rakuten Market”, where customers can rate and comment on the products they purchase on a five-point scale. They also display a ranking of best-selling products, which serves as one of the decision-making factors for users when purchasing products.

This system company, aiming for high rankings, accepted requests from 121 stores and entered into a contract to post 150 favorable reviews per month for a monthly fee of 80,000 yen. They repeatedly posted fake reviews and made fictitious orders, with a known total of 114,327 posts. The actions of this system company fall under the category of “impersonation-type” scamming. They posted numerous positive reviews praising the products of the contracted vendors, thereby pushing those products to the top of the rankings and increasing sales for the vendors. This is a practice that takes advantage of consumer psychology, where products with many reviews are often perceived as popular and are therefore chosen.

Does Stealth Marketing Constitute a Violation of the Japanese Act against Unjustifiable Premiums and Misleading Representations?

The Japanese Act against Unjustifiable Premiums and Misleading Representations sets the rules for companies when advertising and promoting their products or services. It aims to prevent consumers from making incorrect decisions by imposing restrictions on the advertiser.

Article 5, Paragraph 1 of this Act prohibits:

1. Representations that suggest the product or service is significantly superior to its actual quality
2. Representations that falsely suggest the product or service is significantly superior to that of a competitor

These prohibitions are in place if such representations could unfairly attract customers and hinder the voluntary and rational choices of general consumers. This is referred to as the prohibition of “misleading superior quality representations”.

Furthermore, Article 5, Paragraph 2 prohibits:

・Representations that could mislead general consumers into believing that the product or service is significantly more advantageous to the customer than the actual product or service, or those provided by other businesses offering similar products or services

These prohibitions are in place if such representations could unfairly attract customers and hinder the voluntary and rational choices of general consumers. This is referred to as the prohibition of “misleading advantageous representations”.

While it is sometimes argued that stealth marketing could potentially violate Article 5, what is prohibited are specifically “representations suggesting significant superiority” and “representations that could mislead general consumers into believing they are significantly advantageous”. As long as the promotion is within the normal range, it will not be a problem under the Act against Unjustifiable Premiums and Misleading Representations. After all, advertising and promotion are essentially “representations suggesting superiority” and “representations indicating advantages to general consumers”.

Therefore, there is no law that generally deems stealth marketing illegal. In other words, “excessive stealth marketing could potentially be illegal, similar to exaggerated advertising”.

Two Types of Damage Caused by Stealth Marketing by Competitors

When a competitor engages in stealth marketing, the first immediate damage that occurs to a company is a decrease in its own sales as a result of the competitor increasing their sales in the same market through stealth marketing tactics. For example, a case where a competitor conducts stealth marketing in Amazon’s customer reviews, posing as a popular product, resulting in a decrease in sales of your own product. If you can stop stealth marketing by competitors, you can prevent such a decrease in sales. However, the conclusion is that it is quite difficult to remove stealth marketing by other companies.

Generally speaking, when you want to legally remove an article on the Internet, you would request a “transmission prevention measure”, saying, “My rights are being violated because of this article, so I want you to remove it.” However, stealth marketing by competitors does not directly violate your company’s rights. Also, the Japanese Premiums and Representations Act does not generally recognize the rights of consumers, so you cannot say, “I am a consumer, and my rights under the Premiums and Representations Act are being violated because of this company’s stealth marketing, so I want you to remove this article.” This is a bit of a legal challenge…

However, if it is a violation of the terms of use, not a legal claim, there may be cases where it is recognized. For example, the terms of use of “NAVER Matome” include the following:

Article 3 (Prohibited Acts)

Users shall not engage in any of the following acts when using this service, and guarantee that they will not engage in any of the following acts:

(1) Acts that violate laws, court judgments, decisions or orders, or legally binding administrative measures.

(Omitted)

Article 4 (Handling of Content)

If the Company determines that a user’s posted content violates or is likely to violate laws or these terms, or if there is a business necessity, the Company may make the service or posted content unusable by methods such as deleting the posted content from the server managed by the Company without prior notice to the user. Therefore, users are always recommended to create backups of their posted content.

In other words, stealth marketing posts that violate the Japanese Premiums and Representations Act are prohibited as acts that violate laws under the terms of use of “NAVER Matome”, and the operating company may delete such posts if it determines that the “Matome” article posted violates or is likely to violate laws. Therefore, there is a method of reporting to the operating company of “NAVER Matome” that stealth marketing by competitors is being conducted and should be deleted in accordance with the terms of use.

It is the same for Amazon customer reviews and other bulletin board sites, where “posts that violate laws” are often prohibited.

https://monolith.law/reputation/amazon-customers-reviews (ja)

Direct Damage Caused by Being Involved in Stealth Marketing and Product Defamation

There is another type of damage caused by a competitor’s stealth marketing.

This is because competitors may use stealth marketing to promote their own products by disparaging rival products.

For example, an affiliate site, at the request of Company A, may promote Company A’s humidifier by listing the shortcomings of Company B’s humidifier, such as “low deodorizing and dust collection capabilities,” “doesn’t alleviate itchy nose due to pollen,” “prone to water leakage,” and so on, to encourage the purchase of Company A’s products. If it is said that “the effect is not as expected,” it will cause direct damage to Company B’s sales, beyond simply making it harder for their products to sell as a result of Company A’s products selling well in the market.

So, how should Company B respond in this situation?

This is a problem common to negative campaigns. The same kind of direct damage occurs when your own product is ranked low on ranking sites and the like. It is annoying and very troublesome to be involved in a strategy of disparaging others to raise one’s own evaluation.

In such cases, it is possible to request the removal of the article on the grounds of defamation, etc., not because of the “stealth marketing” itself, but because your own product is being unfairly disparaged. However, since this is a bit off from the typical case of defamation, it is thought that it is often difficult to respond unless you are someone who has handled a large number of standard defamation claims and has extensive experience in article deletion.

For example, we have detailed explanations in the following article on how to respond when your own product is unfairly disparaged on a ranking site staged by another company.

https://monolith.law/reputation/self-made-rankingsite (ja)