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FTC Bans Fake Online Reviews: A Win For Honest Consumers And Businesses

August 19, 2024

In a significant move to safeguard consumers and promote fair competition, the Federal Trade Commission (FTC) has announced a new rule that bans fake online reviews and testimonials.

This rule, which comes after extensive public consultation and careful consideration, will crack down on deceptive practices that have plagued online marketplaces for years.

Image by Hannes Edinger

FTC Chair Lina M. Khan emphasized the importance of this new rule, stating, “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors. By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

The new rule prohibits several deceptive practices, including the creation, sale, or purchase of fake or misleading reviews and testimonials, whether they are generated by AI, company insiders, or other deceptive means. It also bans businesses from incentivizing reviews that express a particular sentiment, either positive or negative, and from using fake social media indicators like bot-generated followers or views.

This rule marks a significant step forward in the FTC’s ongoing efforts to protect consumers and ensure a level playing field for businesses. By targeting fake reviews and deceptive testimonials, the FTC is not only protecting consumers but also supporting honest businesses that play by the rules.

The rule will become effective 60 days after its publication in the Federal Register, and businesses across the country are now on notice. With this new tool, the FTC is poised to take stronger action against those who engage in deceptive practices, ensuring that consumers can trust the reviews they rely on when making purchases online.

Consumers can expect to see the FTC’s fake-review ban go into effect starting in mid-October.