A federal regulator has announced its final rule to crack down on deceptive reviews and other marketing practices by outright banning them and allowing the agency to seek civil penalties against violators.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” she said.
“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 on the Use of Consumer Reviews and Testimonials covers trafficking in fake reviews including those by nonexistent customers, company insiders, or through the use of artificial intelligence.
It also prohibits the buying and selling of fabricated views or followers on social media through the use of bots or an equivalent. Intimidating or threatening customers to remove negative reviews will now also be banned under threat of civil penalties from the FTC.
“They harm the many consumers relying on them to pick products and providers, subverting people’s ability to make informed decisions,” he said.
“They also hurt competitors who work hard to comply with the law.”
According to Atleson, the process of bringing this law to life began in 2022, with an advance notice of proposed rulemaking, and was followed by an informal hearing in February.
Atleson said that public comments and other feedback helped shape the rule, with the FTC making numerous clarifications and adjustments to its previous proposal. However, overall, the goal remained the same.
“The new rule remains focused on fighting clearly deceptive practices involving reviews and testimonials and not burdening honest businesses,” Atleson said.
“Any deceptive or unfair practice involving reviews or testimonials which the rule does not cover is still subject to the FTC Act.”
