Most products with an online marketing presence generally have “customer reviews.” However, today’s consumers cannot always trust that those reviews are from real purchasers or provide honest feedback about the quality of a product. The Federal Trade Commission (FTC) has sought to address these concerns, proposing a new rule aimed at stopping marketers from using illicit review and endorsement practices, including using fake reviews, suppressing honest negative reviews, and paying for positive reviews. Proponents of the rule argue these types of practices deceive consumers who are looking for honest feedback on a product or service.

In response to more than 100 comments from the proposed rule, FTC announced that it will hold an informal hearing on February 13, to hear statements addressing perceived issues with its proposal. Interactive Advertising Bureau, Fake Review Watch, and a group of academic researchers are among those expected to present their positions.

Samuel Levine, the FTC’s director of the Bureau of Consumer Protection previously commented that the FTC’s proposed rule “shows that we’re using all available means to attack deceptive advertising in the digital age.” The notice of its proposed rule cited examples of clearly deceptive practices involving consumer reviews from its past cases and acknowledged the emergence of artificial intelligence (AI) tools making it easier for bad actors to write fake reviews.

A press release issued by the FTC last summer highlighted exactly how the rule intends to battle fake reviews.[1] Specifically, the proposed rule would prohibit:

• Selling or Obtaining Fake Consumer Reviews and Testimonials: The proposed rule would prohibit businesses from writing or selling consumer reviews by someone who does not exist, who does not have experience with the product or service, or who misrepresents their experiences. Importantly, the rule aims to prohibit businesses from procuring such reviews or sharing testimonials that it knew or should have known were fake or false.
• Review Hijacking: Under the proposed rule, businesses would not be permitted to use or repurpose a consumer review intended for one product in a way that suggests it was written for a substantially different product. The FTC is already active in this space, having recently filed its first enforcement action.[2]
• Buying Positive or Negative Reviews: The proposed rule would also ban businesses from providing compensation or other incentives for the writing of consumer reviews that express a particular sentiment.
• Insider Reviews and Consumer Testimonials: The rule would further prohibit officers and managers from writing reviews or testimonials, or circulating such reviews without proper disclosure of their relationships to the companies. Similarly, the rule would prohibit certain solicitations by officers or managers of reviews from company employees or their relatives, depending on whether the business knew or should have known of these relationships.
• Company Controlled Review Websites: Under the proposed rule, businesses may not create or control a website that claims to provide independent opinions about a category of products or services that includes its own products or services.
• Illegal Review Suppression: Businesses would also not be able to use unjustified legal threats, intimidation, or false accusations to prevent or cause someone to remove a negative consumer review. The rule would further bar businesses from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been deleted or otherwise suppressed.
• Selling Fake Social Media Indicators: Finally, businesses would be prohibited from selling false indicators of social media influence, such as fake “followers” or “views.” It also would bar anyone from buying “followers” or “views” to misrepresent their importance for a commercial purpose.

Takeaway

Fake reviews and testimonials erode consumer confidence and impact nearly every corner of commerce. As the use and sophistication of AI have exploded over the past few years and show no sign of slowing down, regulatory concerns in this area will continue to grow. Despite pushback from marketers and others who may be heard at the February 13 hearing, we can expect robust FTC enforcement in this space for years to come. Businesses will need to keep a close watch on these developments to ensure that any policies or practices related to collection and maintenance of reviews comply with FTC’s standards.

[1] See Press Release, FTC, Federal Trade Commission Announces Proposed Rule Banning Fake Reviews and Testimonials (June 30, 2023) https://www.ftc.gov/news-events/news/press-releases/2023/06/federal-trade-commission-announces-proposed-rule-banning-fake-reviews-testimonials

[2] See Press Release, FTC, FTC Charges Supplement Marketer with Hijacking Ratings and Reviews on Amazon.com and Using Them to Deceive Consumers (Feb. 16, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-charges-supplement-marketer-hijacking-ratings-reviews-amazoncom-using-them-deceive-consumers.