New Federal Trade Commission Rules Prohibit All Forms of Fake Reviews, With Penalties of $51,744 Per Violation

There’s a new sheriff in town, and he’s coming after fake Amazon and Yelp reviews, among other interlopers.

Online reviews of all stripes have seen their credibility greatly diminished in recent years, and the Federal Trade Commission is now taking steps to restore their usefulness as a consumer-protection tool.  On Tuesday, a new FTC rule that had been promulgated in August prohibiting deceptive online reviews went into effect.

The new set of regulations empowers federal authorities to impose civil penalties of up to $51,744 per violation on those who manipulate the digital marketplace through the use of dishonest reviews, artificial intelligence, or bots.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” Lina Khan, chair of the FTC, said in a statement. “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 FTC’s new rules specifically target fradulent practices, the manipulation of social media, the proper representation of non-independent reviews, intimidation against customers, and the representation of fake individuals actual reviews,

The rules, which seek to uphold the integrity of review systems, target companies that offer any form of compensation for reviews and those which artificially inflate their social media presence by purchasing followers. Both practices are now illegal and the rules also require a company to falsely indicate that a review it either writes or commissions was independent.

The new rules also forbid companies from attempting to intimidate customers who leave negative reviews and from creating reviews and/or testimonials that are attributed to non-existent customers or that are generated by artificial intelligence.

Despite the new regulations, Khan said consumers should remain vigilant, as some businesses may still try to circumvent the rules. She said that the public should not hesitate to report any observed rule violations by submitting a form on the FTC’s fraud page.

(Photo: Accura Media Group)