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The US Federal Trade Commission has announced a final rule to combat fake reviews and testimonials. The rule comes into effect in October this year. It gives the agency more power to combat fraudulent practices online and to seek civil penalties against violators.
Chair of the FTC Lina Kahn said fake reviews waste people’s time and money, pollute the marketplace and divert business away from honest competitors.
“By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”
The FTC’s news release outlines the main points of the final rule, which bans:
- The sale, purchase or creation of fake or false consumer reviews and testimonials
- Buying positive or negative reviews
- Undisclosed insider reviews and consumer testimonials
- Company-controlled review websites portraying reviews of own products and services as independent
- Review suppression through threats or falsely portraying reviews as representative when some have been suppressed
- Misuse of fake social media indicators through the buying or selling of followers or views generated by bots or hijacked accounts
The ruling does not place any liability or obligation on online platforms such as Google so its effectiveness remains to be seen, but it is certainly a big step in the right direction.
Read the full text of the final rule here.
