FTC Finalizes Regulations Against Fake Reviews
FTC's New Rules on Fake Online Reviews
The Federal Trade Commission (FTC) has taken a decisive step in combating the rampant issue of fake online reviews by finalizing new regulations. These rules, which were approved with a unanimous 5-0 vote, aim to prevent the buying and selling of fake consumer reviews, including those created by artificial intelligence.
Key Provisions of the New Regulations
- The rules prohibit providing compensation or incentives for writing consumer reviews that express a specific sentiment.
- Businesses are barred from misrepresenting that a website they control provides independent reviews of products or services.
Significant Penalties for Violators
Non-compliance with these new regulations will come at a steep cost, with potential fines reaching as high as $50,000 per violation.
Background of the FTC's Actions
The FTC's move follows a series of previous investigations into companies that engaged in deceptive practices. Notably, in 2019, the agency penalized Cure Encapsulations Inc. with a $12.8 million fine for buying fake reviews. Similarly, companies such as The Bountiful Company and Sunday Riley have faced inquiries regarding review hijacking and employee-written fake reviews respectively.
Industry Response
In addition to governmental action, other platforms like Yelp have also taken initiatives to discourage the trade of fake reviews by maintaining a database of businesses issued warnings for such practices.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.