In a long-awaited move, the FTC has proposed a new rule that aims to ban various forms of deceptive reviews, ranging from outright fabrications to manipulated and repurposed content.
While it may not completely eradicate the problem, this rule is a step towards making the online review system more reliable and trustworthy.
The FTC’s involvement in combating fake reviews dates back to 2019 when it took action against a merchant who made misleading claims and paid for fabricated reviews.
Prior to that, the agency addressed the lack of transparency in “influencer marketing,” where individuals failed to disclose their paid endorsements.
Now, after thorough research and consultation with businesses, consumers, and advertising trade organizations, the FTC is ready to take comprehensive action by proposing rules that have reached the near-final stage.
Not surprisingly, some advertising trade organizations have opposed these rules, arguing that the prevalence of fake reviews has not been adequately demonstrated and that the regulations would be burdensome.
However, consumer advocacy organizations, major online companies, and common sense argue otherwise, highlighting the billions of fake reviews already taken down and the compromised state of platforms like Amazon.
The FTC acknowledges the growing threat posed by generative artificial intelligence, which makes it easier for bad actors to create fake reviews.
Despite this challenge, the proposed rules have been carefully crafted to target illegitimate practices while safeguarding legitimate commerce and acceptable review solicitation, such as providing a product for an honest review.
To delve into the details of the proposed rule, you can refer to the full notice of proposed rulemaking. However, if you prefer a condensed version, the FTC has provided a news release summarizing the newly prohibited actions, which SurgeZirc SA have further condensed below:
- Prohibition on selling or soliciting fake reviews: This includes fabricated profiles, AI-generated reviews, or individuals who have not genuinely used the product. Businesses engaging in these practices can face penalties if found guilty.
- No review hijacking: Companies are prohibited from manipulating reviews by shifting them from one product to another. Recently, a company had to pay $600,000 for engaging in such behavior.
- No buying positive or negative reviews: It is forbidden to purchase reviews to boost one’s own or another product’s reputation.
- Disclosure requirement for reviews by company leadership or related individuals: Reviews from individuals associated with the company, such as family members or employees, must be clearly disclosed.
- No running deceptive review sites: Companies cannot operate review sites that claim to be independent when, in reality, they promote their own products.
- No suppression of reviews through legal threats or intimidation: Companies are barred from using legal tactics or intimidation to suppress negative reviews by falsely claiming defamation.
- No selling of fake engagement: The rule prohibits the sale of artificial engagement, such as followers and video views.
The proposed rule is currently open for public comment, and the FTC will carefully consider any new information provided during the 60-day comment period.
Based on the feedback received, the agency will make necessary adjustments to the rules before putting them to a vote.
Addressing the challenge of dealing with companies abroad involved in deceptive practices, the FTC acknowledges the difficulty but remains determined to take action against U.S. companies that pay for fake reviews.
While the agency did not provide further details on defining and detecting AI-generated content and fake engagement, it is undoubtedly an area of concern that needs attention.