FTC Bans Fake Online Reviews

The Federal Trade Commission (FTC) has made it illegal to buy or sell fake reviews in return for payment. The new rule also outlaws lying about who wrote a review and includes several other measures designed to make reviews more trustworthy.

The "Trade Regulation Rule on the Use of Consumer Reviews and Testimonials" was approved unanimously by the FTC and, once formally published, will take effect after 60 days. It follows a consultation and review spanning nearly two years.

Threats Outlawed

The rule is wide-ranging, banning the following actions based on creating, buying or selling a fake review.

This includes:

• falsely claiming a review is by someone who doesn't exist (eg an AI-written review)
   
• lies about the reviewer's actual experience, or claims to be from a reviewer who didn't actually use the product or service
   
• paying a reviewer on the specific condition they express a particular sentiment, whether positive or negative
   
• not revealing that a review is by a "company insider" such as an officer, manager, employee or agent
   
• businesses claiming their site provides independent reviews when it covers rival products and services in its own industry - this applies even if the business isn't reviewing its own products or services
   
• using threats to make people remove or avoid writing a negative review
   
• falsely claiming a review site is representative if reviews have been suppressed because they have a low rating or are negative.

$50k Fines

The rule also includes a ban on buying or selling "fake indicators of social media influence". This includes cases where accounts are automated or hijacked to falsely inflate view counts or follower numbers. This ban only applies where the buyer knows the indicator is fake and uses it to make themselves look more influential or important or commercial purposes.

The FTC will have the authority to seek civil penalties of up to $51,744 for each violation, with a court deciding what counted as an individual violation.

That's a standard penalty for breaching many FTC rules. The oddly specific amount is because it is increased by inflation each year.

What's Your Opinion?

Do you support or oppose the rule? Do any of the elements go too far? Will the threat of financial penalties deter bogus reviews?