FTC’s New Regulation Against Fake Reviews Take Effect

United States Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials

Primary Category: Government Regulation

Author:
•  SCARS Editorial Team – Society of Citizens Against Relationship Scams Inc.
•  Portions by the United States Federal Trade Commission
•  Analysis by Tim McGuinness, Ph.D. – Anthropologist, Scientist, Director of the Society of Citizens Against Relationship Scams Inc.

About This Article

The Federal Trade Commission (FTC) has introduced a final rule to combat fake reviews and deceptive testimonials, marking a significant move to safeguard consumers from misleading practices. This rule explicitly prohibits the sale or purchase of false reviews, AI-generated reviews, and testimonials that misrepresent real customer experiences.

Businesses are banned from buying or incentivizing reviews with specific sentiments, and the rule also targets insider reviews by company employees or affiliates, requiring clear disclosure.

Additionally, the FTC is addressing the suppression of negative reviews through intimidation and the misuse of fake social media indicators, such as buying followers or views.

This new rule strengthens the FTC’s ability to seek civil penalties and hold businesses accountable, promoting fairness and transparency in the marketplace.

United States Federal Trade Commission Announces its Final Rule Banning Fake Reviews and Testimonials

The rule will allow the Federal Trade Commission to strengthen enforcement, seek civil penalties against violators, and deter AI-generated fake reviews

Federal Trade Commission Announces

The Federal Trade Commission today announced a final rule that will combat fake reviews and testimonials by prohibiting their sale or purchase and allow the agency to seek civil penalties against knowing violators.

“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 final rule announced today follows an advance notice of proposed rulemaking and a notice of proposed rulemaking announced in November 2022 and June 2023, respectively. The FTC also held an informal hearing on the proposed rule in February 2024. In response to public comments, the Commission made numerous clarifications and adjustments to its previous proposal.

The Final Rule Prohibits

• Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials: The final rule addresses reviews and testimonials that misrepresent that they are by someone who does not exist, such as AI-generated fake reviews, or who did not have actual experience with the business or its products or services, or that misrepresent the experience of the person giving it. It prohibits businesses from creating or selling such reviews or testimonials. It also prohibits them from buying such reviews, procuring them from company insiders, or disseminating such testimonials, when the business knew or should have known that the reviews or testimonials were fake or false.
• Buying Positive or Negative Reviews: The final rule prohibits businesses from providing compensation Read More …