The Federal Trade Commission (FTC) announced final rules on Wednesday that will ban companies from creating fake online reviews and testimonials about products, according to a press release from the commission. The new rules also require disclosure of “insider” reviews by people connected to the companies being reviewed, prevent companies from suppressing bad reviews, and ban the purchase of social media influence through fake followers or bots.
The FTC first began the process of cracking down on fake reviews in November 2022 and most recently held a public hearing on the rule in February 2024. The hearings allowed the FTC to hear feedback and make changes to the proposal, clarifying a number of points that may have been confusing to consumers and businesses.
Fake reviews are prohibited, including AI-generated reviews and reviews written by real people who have no experience with the product being reviewed. Purchasing reviews in any form, whether positive or negative, is also prohibited.
So-called “insider” reviews are prohibited from being posted by employees of a particular company, but the FTC said people with a “significant connection” to a company, including “close family members” of employees, should also refrain from posting reviews.
The new rules will go into effect 60 days after publication in the Federal Register, and violations will result in civil penalties rather than criminal penalties, according to a press release from the FTC on Wednesday. The new rules passed a 5-0 vote.
“Fake reviews not only waste people’s time and money, they also pollute markets and take business away from honest competitors,” FTC Chairman Lina M. Khan said in a press release. “By strengthening the FTC’s toolkit to fight false advertising, the final rule will protect Americans from being deceived, put a flag on companies that illegally game the system, and promote fair, honest, and competitive marketplaces.”
The FTC has been aggressive during the Biden administration, stepping up enforcement of rules meant to protect consumers, cracking down on fraud and clamping down on companies. Big tech companies have also been targets of the FTC, and Khan has come under fire from many in the business world who see him as too aggressive.
According to some media reports, Democratic big donors to Kamala Harris’ presidential campaign against Donald Trump are trying to oust her. But it’s unclear what she will decide to do if she wins. Oddly enough, as The New York Times recently pointed out, Trump’s running mate, J.D. Vance, has praised Khan for his anti-big tech stance.
1 Comment
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.