The FTC has announced a final ruling to ban fake reviews and tackle AI-generated content. The Federal Trade Commission announced back in 2023 that it would tackle the ongoing issue of fake reviews and companies that pay or provide free products to users in exchange for positive feedback.
The new rules ban companies from also creating or selling fake reviews. There’s also a big focus on cracking down on AI-generated reviews which have appeared all over the internet and especially on Amazon. Essentially, the FTC’s new rules prohibit the following:
- Offering incentives to customers in exchange for writing positive or negative feedback.
- Reviews and testimonials written by “insiders” at a company who fail to “clearly and conspicuously” disclose their affiliation with the business.
- Company-controlled review websites, which often advertise themselves as providing independent opinions on products they actually own.
- Threatening or intimidating customers into removing negative reviews.
- Buying or selling fake followers or views on social media.
The FTC has detailed its reasoning behind these new rules in a full document. Many of the issues related to deceptive marketing behind products and anti-consumer practices by influencers who provide “positive reviews” in exchange for money and products.
The FTC says there’s little fear of being penalised for using fraud and deception in connection with reviews and endorsements. The new rules will benefit honest competition and business.
The rules go into quite a lot of detail in the document. Many of which express how fleshed-out each point is. Fake or False Consumer Reviews also tackles websites that post fake reviews of so-called “customers” who purchased products from the store. Meanwhile, the post is fake and the review is fake.
There’s also an entire section tackling “fake online stats”. Here, the FTC says it is a violation for a brand, celebrity, influencer or agency to do business and advertise their reach if they have purchased fake bot followers and fans.
Company-controlled reviews then cover content that a brand seeds to the public and paid influencers in exchange for positive reviews. This relates to any advertising done by a person labelled as a “review” which has been influenced by the brand. The person has to openly disclose that they obtained free gifts or payment from the company. This content would be seen as fake or false testimonials with deceptive marketing purposes.
It isn’t clear how exactly the FTC will control these rules. Amazon will likely be targeted first as the platform has come under fire for its AI-generated reviews and undisclosed “company-controlled” reviews. The FTC says it can seek up to $51,744 per violation. The rules are expected to go into effect within the next 60 days.
Source: FTC
