The FTC’s new proposed rule would apply large fines to those found distributing fake reviews online.
The FTC is cracking down on fake reviews. Under the new proposed rules, organisations involved in the buying, selling, and manipulation of reviews could be very much out of pocket. Every time a consumer sees a fake review, it will carry a fine of “up to $50,000” per viewing.
From the FTC release:
Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”
Fake reviews are a huge aggravation online. Quite often they’re not “just” a bogus review that doesn’t really matter. They trick you into buying substandard products. Bogus offers and deals float to the top of a site’s visibility if they have enough positive entries. People are so enamoured of the best scores imaginable that threats can follow on even when a great (and entirely real) review has been left.
Can you be certain that those eBay reviews are genuine? What about that Etsy seller? Is the unusual but one of a kind item on Amazon being floated to the top of the pile with dozens of fake reviews?
These FTC rules aim to help you find out. The range of topics covered are very comprehensive and cover all the bogus review angles you can think of:
- Selling or obtaining fake consumer reviews and testimonials: The proposed rule would prohibit businesses from writing or selling consumer reviews or testimonials by someone who does not exist, who did not have experience with the product or service, or who misrepresented their experiences. It also would prohibit businesses from procuring such reviews or disseminating such testimonials if the businesses knew or should have known that they were fake or false.
- Review hijacking: Businesses would be prohibited from using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product. The FTC recently brought its first review hijacking enforcement action.
- Buying positive or negative reviews: Businesses would be prohibited from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative.
- Insider reviews and consumer testimonials: The proposed rule would prohibit a company’s officers and managers from writing reviews or testimonials of its products or services, without clearly disclosing their relationships. It also would prohibit businesses from disseminating testimonials by insiders without clear disclosures of their relationships, and it would prohibit certain solicitations by officers or managers of reviews from company employees or their relatives, depending on whether the businesses knew or should have known of these relationships.
- Company controlled review websites: Businesses would be prohibited from creating or controlling 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 be prohibited from using unjustified legal threats, other intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule also would bar a business from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been suppressed.
- Selling fake social media indicators: Businesses would be prohibited from selling false indicators of social media influence, like fake followers or views. The proposed rule also would bar anyone from buying such indicators to misrepresent their importance for a commercial purpose.
The really interesting part here is that it isn’t only the fake review posters looking at a whole lot of trouble. It’s the companies sitting in the middle who should have known reviews are fake too. The FTC is tackling this problem on all fronts, potentially reducing the wiggle-room that those involved typically use to get themselves out of trouble. In software land, “rogue affiliates” take the blame all the time and organisations which should likely also be punished get away with a light slap on the wrist. There’s nothing light about $50k per fake review viewing.
As a final warning bell to those tempted to fake it to make it, this isn’t the only financial penalty waiting in the wings. The FTC would also possess the ability to recover money directly for anyone harmed by the fake reviews.
There will be some limits, however. Social media portals and review sites themselves are free of liability unless involved in the creation of the fake reviews. The Washington Post notes that some of the big players are taking the problems caused by fake reviews seriously. Amazon blocked “more than 200 million suspected fake reviews in 2022”. Elsewhere, Yelp flagged 19% of reviews in 2022 as “not recommended”.
All the same, you often don’t have to look hard to find some bogus reviews. Will a combination of large sites continuing to police their backyards and the FTC bringing the proverbial hammer down turn the tide? Perhaps. Even with the new rules on the horizon, areas outside of the FTCs jurisdiction may not play ball. If you’re not in the US, you may experience spammy and fake reviews for some time to come.
Ultimately, as Samuel Levine of the FTC points out to The Washington Post, big review sites may be “running out of excuses”. If they have the most visibility of all of us into these issues on their sites, they’re almost certainly best placed to put an end to it. If they manage to pull it off, they can have all the five star reviews in town.
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