FTC Enforces New Rule Against Fake Online Reviews
In a significant step to uphold market integrity, the Federal Trade Commission's (FTC) rule banning fake online reviews went into effect on Monday. This new regulation aims to curb deceptive practices that harm both consumers and honest businesses. Under this rule, the FTC reserves the right to impose civil penalties on those who knowingly engage in the buying or selling of inauthentic reviews.
The Necessity of the Rule
The marketplace is often clouded by misleading reviews, which not only mislead consumers but also disadvantage genuine businesses. FTC Chair Lina Khan emphasized the detrimental effects of fake reviews in August, stating that they "waste people’s time and money, pollute the marketplace, and divert business from honest competitors." This rule endeavors to weed out such fraudulent activities, ensuring that consumers receive truthful representations and businesses have a level playing field.
Scope of the Rule
The FTC's regulations target a range of deceptive practices. Reviews attributed to non-existent individuals, artificial intelligence, or individuals with no real experience with the product or service are strictly prohibited. Additionally, the creation or sale of phony testimonials is banned, aiming to prevent businesses from engaging in such tactics. Companies will face penalties if they are found knowingly purchasing fake reviews or misleading testimonials, whether through external agencies or internal staff.
Moreover, the rule addresses aggressive practices by businesses to suppress negative reviews, including using unfounded legal threats, intimidation, or false accusations to silence genuine feedback.
Reporting Violations
Individuals who encounter fake reviews or suspect violations can report such instances to the FTC through their online fraud reporting site at https://reportfraud.ftc.gov. By enforcing this rule, the FTC aims to foster a fairer, more honest online marketplace that respects consumer autonomy and rewards truthful business practices.
For more details on this rule, visit the original article from ABC News.