The Federal Trade Commission (FTC) has introduced a significant new rule aimed at enhancing the credibility of online product reviews.
This new guideline, recently finalized by the FTC, targets the elimination of fraudulent and misleading reviews prevalent across the internet. Key prohibitions will include paid reviews and those created by artificial intelligence, with potential fines of up to $51,744 for each violation.
According to FTC chair Lina Khan, “Fake reviews not only waste consumers’ time and money, but also distort the marketplace and undermine honest competitors. By empowering the FTC to combat deceptive advertising, this final rule aims to protect consumers, hold businesses accountable, and foster a marketplace that is fair and competitive.”
What Does the FTC Ban?
The FTC has outlined several key prohibitions within this new rule:
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Fake reviews and testimonials, regardless of whether they are authored by humans or generated by AI, that misrepresent the reviewer’s identity or experience with the product.
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Paid reviews, whether they are positive or negative.
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Reviews from company insiders that present a conflict of interest.
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Companies operating websites that falsely claim to host impartial reviews of their products.
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Employing baseless legal threats or intimidation tactics to suppress negative reviews.
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The practice of buying or selling fake social media followers or views for commercial gain.
This comprehensive list addresses several critical issues surrounding online product reviews. Notably, Amazon reportedly removed 200 million fake reviews from its platform in 2020. The new regulations are designed to help consumers easily identify authentic reviews and reduce the prevalence of deceptive ones.
