FTC Rule Takes Aim at Fake Reviews, Influence Manipulators

In a unanimous vote, the Federal Trade Commission has banned the use of fake reviews, such as those generated by artificial intelligence, and also prohibits reviews or testimonials that are paid for, even if written by humans. The new rule, finalized Wednesday, also reins in other deceptive practices, like paying for fake social media followers, in an effort to stem misleading practices that are increasingly used by marketers. Generative AI has made manufactured reviews easily available, though the agency’s readiness to seek fines against knowing violators may make fabulists think twice before using them.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” FTC Chair Lina Khan said in a statement. “By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

The final rule announced by the FTC prohibits:

Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials: Including “opinions” purporting to represent an individual who does not exist or did not have actual experience with the business, products or services.

Paid-For Positive or Negative Reviews: Compensation or other incentives conditioned on providing “consumer” reviews may not be “expressly or implicitly conveyed.”

Insider Reviews and Consumer Testimonials: Reviews and testimonials created by company insiders that “fail to clearly and conspicuously disclose” the business relationship are verboten. Officers or managers who solicit consumer reviews from relatives or employees — or instruct individuals under their control to do so — are liable.

Company-Controlled Review Websites: Covering digital content aggregator that misrepresents itself as independent with a category featuring a company’s own products or services.

Review Suppression: Using threats, both legal and physical, to scuttle negative reviews is prohibited, as is public-facing review aggregation that disproportionately excises negative reviews.

Misuse of Fake Social Media Indicators: Selling or buying “fake indicators of social media influence, such as followers or views generated by a bot or hijacked account” to inflate the buyer’s influence or importance for a commercial purpose.

CNBC reports “consumers can expect to see the FTC’s fake-review ban go into effect starting in mid-October.”

TechCrunch calls the new FTC rule “a long time coming,” citing third-party Amazon merchants as frequent offenders. In July, Amazon joined forces with the Better Business Bureau in a lawsuit against fake review brokers after independent litigation resulted in a judgment in March. The e-retail giant claims to have “proactively blocked more than 250 million suspected fake reviews” from its online storefront in 2023.

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