FTC wants to end fake reviews for consumers' benefit

The Federal Trade Commission (FTC) wants to put an end to fake reviews, and it has a new rule that is supposed to help with that. This new rule is banning sales and purchases of fake reviews and testimonials.

The FTC came up with a new rule that is supposed to help end fake reviews

This rule also allows the FTC to impose civil penalties on those who willingly break them. Do note that the rule will go into effect 60 days after its publication in the Federal Register. So, in two months, basically.

The FTC Chair, Lina M. Khan, said the following: “Fake reviews not only waste people’s time and money but also pollute the marketplace and divert business away from honest competitors”. She also added: “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”.

Here are the main takeaways

Let’s break down this new rule, shall we? There are several key points that you should take away from this. The rule puts a ban on fake reviews. It “prohibits the creation or distribution of fake reviews”, regardless of whether they’re generated by AI or not.

Incentives for reviews are also forbidden. Companies are not allowed to offer rewards or incentives in exchange for specific types of reviews. It doesn’t really matter if a review is positive or not.

There needs to be a disclosure for insider reviews. In case a company insider writes a review, it must be clearly stated that he has a connection to the business.

The FTC also requires transparency on company-controlled review websites. Companies are basically not allowed to mislead consumers into thinking that review sites they control provide independent opinions/reviews.

Protection against review suppression is also a part of this rule. Companies are not allowed from using threats or intimidation to force negative reviews to go away.

The last point has to do with social media. Fake social metrics are strictly forbidden. Companies cannot sell or purchase fake social metrics, such as followers or views.