Government issues new rule banning deceptive online reviews

The Federal Trade Commission published new rules to ban companies from using bogus consumer reviews to promote products. Commissioners on the FTC approved the new rules 5-0, and they will take effect in October.

The FTC said with the growth of artificial intelligence, it is becoming easier for companies to write fake reviews.

The FTC had first proposed new rules in 2023 concerning fake reviews, and finalized the rules over a year later.

The new rules will prohibit companies from writing or selling consumer reviews by someone who does not exist or did not have experience with the product or service. Businesses will also be banned from using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product.

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Companies will be banned from providing incentives for writing a positive review.

Businesses will be prohibited from disseminating testimonials from employees and their relatives without disclosing their relationship with the company. The rule also prohibits anyone from selling or buying 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,” said FTC Chair Lina M. Khan. “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.”

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The FTC had already charged several companies for using allegedly deceptive reviews to sell products.

Some companies have said they have taken proactive steps toward blocking deceptive reviews.

"Amazon is aggressively fighting fake reviews, using a combination of machine-learning models along with expert investigators to ensure that every review in our store is authentic and reflects customers’ actual experiences," Amazon said earlier this year. "In addition to our proactive technology, one effective way to shutting down fake review brokers completely is legal action. By taking legal action, Amazon is targeting the source of the problem, preventing fake reviews from ever being seen by a customer. As a result of continued investments, Amazon proactively blocked more than 250 million suspected fake reviews from our store in 2023."