FTC Announces Proposed Rule Banning Fake Reviews
The Federal Trade Commission proposed new rules to stop marketers from using illicit review and endorsement practices such as using fake reviews, suppressing honest negative reviews, and paying for positive reviews, which deceive consumers looking for real feedback on a product or service and undercut honest businesses.
In its notice of proposed rulemaking, the Commission cited examples of deceptive practices involving customer reviews and testimonials from its past cases and noted the emergence of generative AI, which may make it easier for bad actors to write fake reviews. Below are the FTC’s proposed rules.
The Proposed Rules
- Selling or Obtaining Fake Consumer Reviews and Testimonials: This proposed rule would prohibit businesses from writing or selling consumer reviews or testimonials by someone who does not exist, who did not have experience with the product or service, or who misrepresented their experiences. It also would prohibit businesses from procuring such reviews or disseminating such testimonials if the businesses knew or should have known that they were fake or false.
- Review Hijacking: Businesses would be prohibited from using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product.
- Buying Positive or Negative Reviews: Businesses would be prohibited from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative.
- Insider Reviews and Consumer Testimonials: The proposed rules would prohibit a company’s officers and managers from writing reviews or testimonials of its products or services, without clearly disclosing their relationships. It also would prohibit businesses from disseminating testimonials by insiders without clear disclosures of their relationships, and it would prohibit certain solicitations by officers or managers of reviews from company employees or their relatives, depending on whether the business knew or should have known of these relationships.
- Illegal Review Suppression: Businesses would be prohibited from using unjustified legal threats, other intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule would also bar a business from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been suppressed.
- Selling Fake Social Media Indicators: Businesses would be prohibited from selling false indicators of social media influence, like fake followers or views. The proposed rule also would bar anyone from buying such indicators to misrepresent their importance for a commercial purpose.
Help is available
The business attorneys at O’Reilly Rancilio are available to answer your questions regarding the FTC and its proposed rulemaking. To learn more, please call 586-726-1000 or visit our website.