The Federal Trade Commission has announced new regulations aimed at prohibiting companies from utilizing misleading consumer reviews for product promotion. The FTC commissioners unanimously approved these regulations, which will become active in October.
The FTC noted the increasing ease with which companies can generate fake reviews due to advancements in artificial intelligence.
The initial proposal for regulations on fake reviews was made by the FTC in 2023, with the finalized rules being established over a year later.
The new regulations will forbid companies from creating or selling consumer reviews attributed to fictitious or inexperienced individuals. Additionally, businesses are prohibited from repurposing a review for one product to appear as though it was written for a substantially different product.
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Incentivizing positive reviews and using testimonials from employees or their relatives without disclosing their relationship with the company are also prohibited. Additionally, the rules prevent the sale or purchase of fake indicators of social media influence.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” expressed FTC Chair Lina M. Khan. “By enhancing the FTC’s ability to combat deceptive advertising, the final rule will safeguard Americans from deceitful practices, notify companies engaging in unlawful tactics, and foster fair, honest, and competitive markets.”
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The FTC has already taken legal action against several companies for utilizing deceptive reviews in product sales.
Some companies have reported implementing measures to combat deceptive reviews. Amazon, for instance, has been actively fighting fake reviews using a combination of technology and expert investigators to ensure the authenticity of reviews on their platform.
