The Federal Trade Commission (FTC) is cracking down on fake online reviews. The rules announced earlier this year are now in effect, prohibiting reviews from fake individuals, text or images generated by artificial intelligence, and those who do not disclose their affiliation with the company or its subsidiaries.
If you find violations of the new policy, you can report them directly to the FTC, with a maximum fine of $51,744.
The updated guidelines from the FTC for online reviews ban six specific types of falsification: reviews from fake individuals or using AI-generated text or images, no paid reviews (or other forms of compensation, such as misleading $10 value coupons thrown in with an Amazon shipment), no reviews from employees of the company offering the product or others with financial relationships, no fake review sites designed to skew search results, no suppression of negative reviews, and no buying or selling of fake “followers” or other social media influence.
FTC Chair Lina Khan announced the rule going into effect yesterday on the social media platform, Twitter, encouraging Americans to report violations on reportfraud.ftc.gov.
As of today, @FTC‘s final rule banning fake online reviews and testimonials has come into effect.
If you encounter any of these prohibited practices, you can report them to @FTC at: pic.twitter.com/60qp2cRJMU
— Lina Khan (@linakhanFTC) October 21, 2024
I believe the new guidelines are great and should make companies like Amazon and Walmart take a more serious look at the increasing number of review bots that ultimately make their markets and product listings less trustworthy.
However, I have serious doubts about the FTC’s ability to effectively enforce these rules. Since most violations come from small sellers manipulating algorithms – and a large amount of them fall outside the jurisdiction of the United States – the measurable impact of this policy could be minimal.
Some means of policing platforms that enable these problems – stores like Amazon, social networks like X and Facebook, etc. – may be a more important way towards actually protecting consumers. However, it would also be a much harder regulatory achievement, and even if attempted, it would result in immediate legal pushback from some of the largest companies on the planet and their political allies.
But having these rules on paper may deter some known laptop makers from, for example, paying for results in online customer reviews or hiding any reviews that highlight particularly bad service. It’s a step in the right direction.
