The U.S. Federal Trade Commission today announced a final rule that will ban marketers from using fake reviews, including those generated with artificial intelligence and other deceptive marketing methods such as paying for bots to inflate follower counts.
The rule allows the FTC to strengthen enforcement and 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,” FTC Chair Lina M. Khan said in a statement. “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 covers six aspects of contrived and fake marketing, starting with banning fake or false consumer rules, consumer testimonials and celebrity testimonials. The rule prohibits reviews and testimonials from someone who does not exist, such as AI-generated fake reviews and reviews from people who have no experience with or misrepresent products. Businesses are also prohibited from buying such reviews, procuring them, or disseminating them where the business knows the reviews are fake or false.
Buying positive or negative reviews is also now prohibited, with businesses no longer able to provide compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative. Though the FTC doesn’t provide examples, the rule could particularly affect online influencers.
Insider reviews written by company insiders that fail to disclose clearly and conspicuously the giver’s material connection to the business are also now banned. Officers or managers are also limited in being able to solicit reviews from employees or relatives.
Businesses are also now prohibited from creating reviews or opinion sites that are presented as being independent review sites from providing reviews or opinions about their own products. The tactic is fairly common among tech companies; for example, a search for online video editing software often results in companies presenting so-called reviews of products that put their own products top and center.
On the social media side, under the final rule, anyone — not just companies — will be prohibited from selling or buying fake indicators of social media influence, such as followers or views generated by a bot or hijacked account. There’s a whole industry around buying fake followers and views, which will be heavily affected by the prohibition, along with countless influencers and celebrities who use such services to present their accounts as being more popular than they actually are.
Finally, and arguably the most serious in terms of legal implications, is that review suppression is now prohibited. Businesses are now prohibited from using unfounded or groundless legal threats, physical threats, intimidation or certain false public accusations to prevent or remove a negative consumer review. The rule also bars businesses from misrepresenting that reviews on a review portion of their website represent all or most reviews when negative reviews have been suppressed.
The FTC voted unanimously 5-0 to adopt the final rule, which will become effective 60 days after the date it’s published in the Federal Register. Presuming that it’s published soon, the rule should go into affect mid- to late October.