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The FTC is prohibiting the creation or purchase of fake reviews and will also seek to prevent the suppression of negative reviews online.
It can be hard to trust anything you read online, but the US Federal Trade Commission (FTC) is moving to make online reviews and testimonials more accurate.
The FTC announced a final rule that prohibits the creation or purchase of fake reviews and gives the Commission powers to seek civil penalties against deceptive businesses.
The FTC said this rule will address reviews that misrepresent and deceive, such as AI-generated fake reviews. The rule also tackles reviews made by people who did not have an actual experience with an organisation they are reviewing and those that “misrepresent the experience of the person giving it”.
The new rule will prohibit businesses from creating or selling these types of reviews or testimonials. It also prohibits businesses from buying fake reviews or procuring them from company insiders. There are also requirements for when officers or managers ask for consumer reviews from their own immediate relatives or from their own staff.
The rule also extends to social media influence as it prohibits anyone from selling or buying fake indicators of influence, such as followers or views generated by bots.
The maximum civil penalty the FTC can seek for fake reviews is $51,744 per violation and the new rule will come into effect 60 days after the date it is published in the Federal Register.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” said FTC chair Lina M Khan. “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 rule also aims to prevent the suppression of negative reviews, as businesses are prohibited from using unfounded legal threats or other intimidation tactics to prevent or remove a negative consumer review.
There have been concerns brewing for years around fake reviews online, particularly on major marketplaces such as Amazon. In 2021, Amazon called on social media platforms for help in stemming fake reviews and criticised those platforms for failing to tackle review selling on their sites.
Both Google and Amazon were investigated by the UK Competition and Markets Authority in 2021 to see if sufficient action was being taken against fake reviews. This investigation has not reach a conclusion, but a new UK bill aims to make fake reviews illegal in the country.
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