On Aug. 14, FTC final rule to prohibit selling, purchasing fake reviews.
FTC issued final rule and Statement of basis and purpose (SBP) re certain unfair or deceptive acts/practices involving consumer reviews/testimonials; added 16 CFR 465.
Follows advance notice of rulemaking, notice of proposed rulemaking, see #178243.
In response to comments, made numerous clarifications and adjustments to proposal.
Reviews and Testimonials
Addressed reviews, testimonials that misrepresent are by someone who does not exist, such as AI; or who did not have actual experience or misrepresented the experience.
Final rule prohibited businesses from creating or selling such reviews or testimonials.
Prohibited from buying reviews, procuring them from insiders, or disseminating such testimonials, when business knew or should have known that reviews were fake/false.
Prohibited businesses from providing compensation or other incentives conditioned on writing of consumer reviews expressing particular sentiment, either positive/negative.
Conditional nature of offer of compensation may be expressly or implicitly conveyed.
Also, prohibited certain reviews and testimonials written by company insiders that fail to clearly and conspicuously disclose the giver’s material connection to the business.
Imposed requirements when officers/managers solicit reviews from own immediate relatives or employees or agents, or when they tell employees to solicit from relatives.
Websites and Social Media
Prohibited business from misrepresenting that website/entity it controls provides independent reviews about category of products/services that includes own products.
Prohibited business from using unfounded or groundless legal or physical threats, intimidation, or false public accusations to prevent/remove negative consumer review.
Barred business from misrepresenting that reviews on review portion of its website represent all or most of the reviews submitted when reviews have been suppressed.
Rule prohibited anyone from selling or buying fake indicators of social media influence.
Limited to situations in which buyer knew or should have known that indicators were fake and misrepresent the buyer’s influence or importance for a commercial purpose.
Effectiveness
The final rule is effective 60 days after the date of publication in the federal register.
Aug. 2024 FTC Final Rule
On Aug. 22, 2024, FTC published final rule in federal register, effective Oct. 21, 2024.
Trade regulation rule on use of consumer reviews, testimonials under 16 CFR 465.
