FTC Announces Ban on Fake Online Reviews, Promoting Fair Business Practices
August 19, 2024
In a move that is a significant win for consumers and businesses, the Federal Trade Commission (FTC) has declared a new regulation banning fake online reviews and testimonials. This milestone decision results from thorough public consultation and deliberation, aiming to combat deceptive practices prevalent in online marketplaces for years.
Image by Hannes Edinger
FTC Chair Lina M. Khan underlined the significance of this new regulation, stating, “Fake reviews not only squander consumers’ time and money but also disrupt the marketplace by steering business away from honest competitors. The final rule fortifies FTC’s arsenal to combat deceptive advertising, safeguarding Americans from getting duped. It sends out a clear warning to businesses that indulge in unfair practices while fostering fairness, honesty, and competitiveness in the market.”
The new rule disallows a range of deceptive practices. These include the creation, sale, and purchase of fake or misleading reviews and testimonials, irrespective of whether they are AI-generated, come from company insiders or are generated by other deceptive means. Businesses are also prohibited from incentivizing reviews that express a particular sentiment, be it positive or negative, and from using fake social media metrics like bot-generated followers or views.
This ruling signifies a major leap in FTC’s ongoing mission to protect consumers and ensure an even playing field for businesses. By taking aim at fake reviews and deceptive testimonials, the FTC is not only safeguarding consumers but also endorsing honest businesses that adhere to the rules.
The regulation will come into effect 60 days after its publication in the Federal Register. Businesses across the nation are duly advised of the impending change. Bolstered by this new tool, the FTC is equipped to take more stringent action against those indulging in deceptive practices, assuring consumers that they can trust the reviews they turn to when making online purchases.
Consumers can expect to see the FTC’s ban on fake reviews come into effect from mid-October.
