The Federal Trade Commission (FTC) recently sent warning letters to 10 companies advising them of possible violations of its Consumer Review Rule (the “Rule”), which became effective in 2024 and prohibits certain unfair and deceptive practices relating to consumer reviews and testimonials.
In announcing the letters, the FTC highlighted that consumers increasingly rely on online reviews to inform purchasing decisions, and that the FTC remains focused on ensuring companies comply with the Rule.
The Rule prohibits a variety of deceptive practices, including:
- Reviews that misrepresent a consumer’s (or a celebrity’s) experience with a product
- Purchasing positive or negative reviews
- Reviews by insiders without a disclosure of the material connection
- Company-controlled review websites that purport to be independent
- Suppressing negative reviews
- Buying or selling fake social media influences, such as fake followers or fake engagement
While there were no formal findings that the letter recipients violated the Rule, the letters served as a reminder of the companies’ compliance obligations and caution that violations may result in federal litigation or other enforcement action, including civil penalties of up to $53,088 per violation.
In addition, the Rule and these letters serve as a reminder to companies—including those working with social media influencers—of the importance of disclosing material connections, maintaining neutrality when soliciting reviews (e.g., using “tell us what you think” rather than “tell us why you love it”), and ensuring that the company and its influencers have not purchased fake followers or engagement.
