FTC Targets Companies That Use Fake Online Reviews

July 12th, 2023 by Jesse Burkhart

Violators of proposed new rule would face penalties

As more marketing departments lean into generative artificial intelligence (AI), the Federal Trade Commission (FTC) has proposed a new rule that bans companies from using fake customer reviews and engaging in illicit endorsement practices.

The FTC’s proposed rule would prohibit buying positive or negative reviews, suppressing honest negative reviews and buying fake social media indicators such as likes, followers and views. It would also bar companies from writing reviews of their own products and services, among other illegitimate practices.

“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” says Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”

FTC officials say such illicit practices deceive consumers looking for real feedback on a product or service and undercut honest businesses. Officials cited examples of deceptive practices involving consumer reviews and testimonials from past cases. They also noted the emergence of generative AI, which makes it easier for bad actors to write fake reviews.

The FTC is now fielding comments on provisions in the proposed rule. After the agency reviews the comments, it will decide whether to take additional steps toward finalizing the rule.

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