Violations of the Federal Trade Commission (FTC) rules on fake reviews and fake testimonials of consumers and celebrities have resulted in the banning of the use of these practices on websites and e-commerce hubs. The FTC approved new rules against the buying and selling of fake reviews and product testimonials in a 5-0 vote on Wednesday. The rules will take effect in 60 days.
The FTC’s new rules address the practice of buying and selling fake consumer reviews, including the use of AI-generated consumer testimonials and celebrity endorsements for products or services. They also prohibit “offering compensation or other incentives contingent on the writing of consumer reviews that express a particular sentiment, positive or negative” and prohibit “an entity from misrepresenting that a website or an entity it controls provides independent reviews or opinions” about products or services. , according to a statement released by the FTC.
The legal ban also comes with stiff penalties for those who break the new rules. Fines can be as high as .
The FTC has officially announced its intention to seek new rules for such practices. The Commission has been trying to regulate fake online reviews and testimonials for years. The first such case was settled in 2019 against the company accused of paying for fake reviews of its weight loss products from the website amazonverifiedreviews.com, and the FTC fined them $12.8 million. The FTC also investigated similar charges against a supplement maker for “review hijacking” its product reviews and ratings on Amazon that resulted in a $600,000 fine, and that created fake reviews online by ordering employees to write them.
The government isn’t the only business trying to discourage the buying and selling of fake reviews. A service recommendation website that lists businesses that have received warnings for posting or buying fake reviews of their Yelp page.
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