Skincare brand Sunday Riley, which is available in Sephora and Mecca, allegedly posted fake reviews of their products on Sephora's website for two years.
According to the US Federal Trade Commission (FTC), Sunday Riley employees were forced to write fake reviews and also dislike negative ones to boost the company's sales.
Sunday Riley, the company CEO, did not admit wrongdoing or recieve any form of punishment but agreed to not write fake reviews as part of the FTC settlement.
The investigation into the Texas-based company started when a former employee took to Reddit and leaked emails that show employees had been asked to write fake Sunday Riley reviews.
"The Commission's investigation confirmed the whistleblower's claim and found that the scheme to generate fake reviews of Sunday Riley products involved Ms Riley herself," FTC commissioners Rohit Chopra and Rebecca Kelly Slaughter said in a statement.
"Rather than relying on satisfied customers to generate real buzz about her products, she directed her employees to write glowing reviews and bury negative ones, while offering detailed instructions on how to avoid detection."
FTC commissioners were unsatisfied with the settlement arguing that the company should have paid a higher price. In a letter, Chopra and Slaughter wrote: "The FTC should seek monetary consequences for fake review fraud, even if the exact level of ill-gotten gains is difficult to measure."
In a letter, the FTC shared snippets of emails Riley had sent to her employees.
"If you see a negative review - DISLIKE it," Riley said in one of her emails. "After enough dislikes, it is removed. This directly translates to sales!!"
Interns last year were also allegedly asked to make fake Sephora accounts and post fake reviews about a series of Sunday Riley products.
The email that triggered the FTC to final a complaint against the company expressed detail on how to install a VPN so the fake reviews could not be traced.
After the leak was posted on Instagram by user Estee Laundry, the skincare brand defended its actions.
"The simple and official answer to this Reddit post is that yes, this email was sent by a former employee to several members of our company," Sunday Riley responded to the post.
"At one point, we did encourage people to post positive reviews at the launch of this product, consistent with their experiences."