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Federal Trade Commission () About fake reviews and testimonials. If the rule goes into effect, businesses will also be prohibited from inflating their social media metrics with fake follower and view numbers.
This isn’t the first time the agency has trained to monitor fake reviews. In the first such case, she fined her third-party Amazon seller (Amazon itself has fined them) for paying for fake reviews. Earlier this year, the FTC fined vitamin brand owners $600,000.
New rules government agencies said they were working on is nearing a final decision, which includes stiff penalties for those caught selling fake reviews and testimonials.As The FTC said it plans to impose fines of up to $50,000 on companies that “buy, sell, or manipulate online reviews.” This isn’t just a problem with every fake review, it’s a problem every time a consumer sees that review. So if the FTC finds out that a fake review has been viewed only 20 times, the company that bought the review could sue him for $1 million in damages.
“Our proposed rule on fake reviews shows that we are going to great lengths to attack deceptive advertising in the digital age,” FTC Consumer Protection Director Samuel Levin said in a statement. ‘ said. “The rule will impose civil penalties on violators and should help level the playing field for honest businesses.”
The FTC expressly prohibits “a company from writing or selling consumer reviews or testimonials by people who do not exist, have no experience with the product or service, or misrepresent their experience.” want to be. Similarly, businesses are not permitted to obtain or disseminate reviews or testimonials that they “knew or should have known were fake or false.”
Repurposing an existing review to make it appear as though it was written for another product (i.e., review hijacking) provides payment or other types of compensation for positive or negative reviews. is illegal as well as doing The FTC says companies can still ask users to leave reviews, as it’s an important way to build a reputation for small businesses.
Managers and executives are not permitted to post reviews of their products without explicit disclosure, nor may they ask family members or employees to post reviews under certain circumstances. Under the proposed rule, businesses would not be permitted to operate websites that claim to provide independent reviews of categories of products or services, including their own products.
Suppressing reviews is also prohibited. Businesses may not use intimidation tactics, such as legal threats or false accusations, to coerce customers into removing or not leaving negative reviews.
The FTC also wants to ban companies from using fake followers and views to overstate social media numbers. “The proposed rule would also prohibit the purchase of such indicators with the intent to misrepresent their importance for commercial purposes,” the agency said. This is a provision that can have far-reaching implications beyond commercial transactions. Influencers may need to keep bots out of the equation when trying to secure deals with brands.
On the other hand, the proposed notice for this rule highlights the popularity of . “AI chatbots reportedly being used to create fake reviews,” it reads. “As the report points out, the proliferation of AI chatbots may make it easier for bad actors to write fake reviews.”
This rule does not take effect immediately. The directive will be open to public comment for his 60 days, after which the agency will consider changes before finalizing the directive.
Many of these provisions make sense. Essentially, the FTC seeks to ensure that companies and brands are transparent and honest with consumers. However, actually enforcing these measures is another matter. According to the agency, director It said it wouldn’t get additional resources to combat fake review providers, but the codified rules could give it an edge in court. It can also be difficult to fight companies based abroad that sell or post fake reviews. Still, a formal ban on such behavior and the threat of eye-watering fines may be enough to deter some companies from using fake reviews.