FTC Bans Fake Reviews In Sweeping New Rule

The Federal Trade Commission (FTC) has announced a new rule to combat fake reviews and hold businesses accountable for deceptive practices.

Key Provisions Of The New Rule

The rule targets review fraud in the following ways:

• No fake reviews: You can’t make up, buy, sell, or share false reviews. This includes AI-generated reviews.
• No bribes for good reviews: Businesses can’t pay or reward people for leaving positive reviews.
• Honesty about connections: If you work for or have ties to a business, you must say so when reviewing it.
• No bullying to remove bad reviews: Businesses can’t use legal threats to scare people into taking down negative reviews.
• No fake popularity: Buying or selling fake likes, followers, or views on social media is prohibited.

FTC Chair Lina M. Khan stated:

“Fake reviews not only waste people’s time and money but also pollute the marketplace and divert business away from honest competitors.”

Background & Development

The FTC created this rule through several steps:

• In November 2022, they announced they considered making a new rule.
• In June 2023, they shared their first draft of the rule.
• In February 2024, they held a public meeting to discuss the proposed rule.

Along the way, they listened to feedback and made changes to improve the rule.

All five FTC commissioners agreed on the final version and voted to approve it.

What Does This Mean

Here’s what this new regulation means for digital marketers and businesses:

• Companies must pay closer attention to how they get and manage reviews.
• Watch out for fake AI reviews. The FTC is aware of new tech being used to bolster review scores.
• People who promote products online must be clear about their connections to the companies they’re talking about.
• Businesses can’t threaten customers to take down negative reviews.

When these rules are enacted, the FTC can fine companies that knowingly break them.

To comply with the new regulations, businesses may need to:

• Audit their current review acquisition practices.
• Implement stricter guidelines for employee and influencer disclosures.
• Invest in customer experience improvements to naturally generate positive reviews.
• Develop ethical strategies for handling negative feedback.

What’s Next?

The FTC’s new rule could improve customers’ shopping experiences and make them feel safer buying online.

It becomes effective 60 days after being officially published, which means it will be in effect in about two months.

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