The United States Federal Trade Commission (FTC) has banned fake reviews and testimonials in a 163 page “final rule” regulation set for publication.
Announced August 14th, the FTC prefaced their 163 page “final rule” with a summarizing statement. The ruling bans anything that could “mislead” a consumer who would utilize third parties to make a decision. This includes fake reviews, fake testimonials (including those from celebrities), and fake “social media indicators” (such as followers or likes).
The FTC defines a fake review as being from someone “who does not exist, such as AI-generated fake reviews, or who did not have actual experience with the business or its products or services, or that misrepresent the experience of the person giving it.”
It’s unclear how the FTC will enforce “misrepresented experiences” from reviewers.
The rule also bans pay-to-play reviews; whether they’re positive or negative, regarding their own or a rival’s product or service.
Businesses also cannot have an “insider” create reviews, create company-owned websites that present themselves as hosting independent reviews, or suppress genuine reviews (such as via legal threats, intimidation, libel, or slander).
In short, a review or testimonial must come from a real person discussing how they feel about a product or service, with no other influence over them. The FTC will forbid “providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative.”
The FTC summary provides: “It clarifies that the conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed.” This in turn should mean a reviewer believing a positive review will grant them future “gifts” without the business making such a promise would still be void, as the business couldn’t offer the initial gift that gave them such a belief.
The register notice (page 157) defines purchasing a consumer review as “means to provide something of value, such as money, gift certificates, products, services, discounts, coupons, contest entries, or another review, in exchange for a consumer review.” As such, even the promise of future reviewing opportunities is an incentive.
FTC Chair Lina M. Khan explained, “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.”
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Nonetheless, there may be some teething problems in the case of genuine user reviews and “review bombing.” This is a flood of negative reviews, usually after a business has announced something that makes their product or service reviled. This can also be an act of protest against a business.
The text doesn’t clarify how much a person would have to use a product or service to be considered having “actual experience.” On pages 56 and 57, one commenter proposed a scenario where a person tasted food from a restaurant, but didn’t go into the establishment.
The commission stated the “posited hypotheticals did have legitimate experience with the product or service but should not misrepresent that experience as more than it was.”
For example, review aggregate websites such as Metacritic and Rotten Tomatoes offer no way to prove if a user actually watched or played the media they are reviewing. On the other hand, gaming platform Steam only allows you to review a game you’ve purchased, and it shows others how long you played the game for.
Steam also denotes if there is a large influx of negative reviews, and attempts to disregard those that are “off topic” from the game’s overall review metrics.
There’s also the factor of a user complaining about an element they knew was in a piece of media (via marketing materials). Could a review be deemed “fake” if the user complains about something they knew they were going to get?
The new rules will allow the FTC to tackle violators by “prohibiting their sale or purchase and allow the agency to seek civil penalties against knowing violators.” The rule will become effective 60 days after publication in the Federal Register.