The Federal Trade Commission (FTC) has introduced a new rule aimed at eliminating fake reviews and deceptive practices in the marketplace. This rule, effective 60 days after publication, targets several unethical behaviors:
Key Prohibitions
Fake Reviews and Testimonials: The rule bans the creation, sale, or dissemination of fake consumer reviews, testimonials, and celebrity endorsements, including AI-generated reviews and those from individuals without actual experience with the product or service.
Paid Reviews: Businesses are prohibited from compensating individuals for writing reviews that express a specific sentiment, whether positive or negative.
Insider Reviews: Reviews and testimonials from company insiders must clearly disclose their connection to the business. This includes reviews from officers, managers, employees, or their immediate relatives.
Company-Controlled Review Websites: Businesses cannot misrepresent that a website they control provides independent reviews of their own products or services.
Review Suppression: The rule prohibits businesses from using threats or intimidation to prevent or remove negative reviews. It also bars misrepresenting the comprehensiveness of reviews on their websites.
Fake Social Media Indicators: The sale or purchase of fake social media followers, likes, or views is prohibited, especially when used to misrepresent influence for commercial purposes.
Enforcement and Compliance
The FTC will seek civil penalties against violators to enhance deterrence and strengthen enforcement actions. Businesses must audit their review practices to ensure compliance and avoid fines.
Background and Implementation
The rule follows a series of proposals and public comments, with the final version incorporating numerous adjustments. The FTC's decision to approve the rule was unanimous (5-0).
Additional Information
The FTC emphasizes its role in promoting competition and protecting consumers. It advises the public to report fraud and stay informed through its resources.
For more details, visit the FTC's consumer website or report fraudulent activities at ReportFraud.ftc.gov.
