Understanding the FTC’s Fake Review Rules

The Federal Trade Commission (FTC) recently released new regulations that ban the use of fake reviews and testimonials. The language around the new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (the “final rule”) is extensive, and the rulemaking document is 163 pages long. While we’ve (briefly) summarized the final rule in this article, we encourage you to read the final rule in full or reach out to your legal counsel if your company uses fake reviews or incentivizes users to write positive reviews.  

What Does The Final Rule For Fake Reviews Cover?  

The final rule is designed to broadly prevent companies from misleading consumers about the quality of products or services.  

The following categories of behaviors are covered by the final rule:  

Fake or false reviews 

These are reviews or endorsements by people who do not exist (including AI-generated reviews) or did not actually use or test the product, including those who misrepresent their experience with it. It also covers situations where companies repurpose reviews from another product.  

Incentivized reviews 

These are reviews or endorsements by people who were paid or provided with other incentives to write a particular type of review (either positive or negative). Incentives are permitted under the new rules, but only if they are not explicitly or implicitly conditional on the review’s content. For instance, the FTC has warned companies that language like “Tell us how much you loved your visit to John’s Steakhouse and get a $5 coupon” could be problematic under the new rules, since it suggests the review should be positive for the consumer to receive the benefit.  

Insider reviews 

This includes endorsements from senior team members or their employees or family members without clear disclosure of that relationship.  

Deceptive third-party reviews 

The creation or operation of third-party websites or entities that purport to provide independent reviews but are controlled by the companies offering the product/services is banned. 

Review suppression  

The FTC’s final rule aims to prevent businesses from unfairly silencing or hiding negative feedback. Here’s what the final rule prohibits: 

1. Unjustified threats or intimidation: Businesses cannot use baseless legal threats, physical threats, or any form of intimidation to prevent consumers from posting negative reviews or to force them to remove existing ones. 
2. False accusations: Similarly, businesses cannot make false public accusations against reviewers to discredit their negative feedback or discourage others from sharing their honest opinions. 

1. Misrepresentation of reviews: If a business has suppressed negative reviews (by selecting not to display them), it cannot claim that the reviews displayed on its website represent all or most of the feedback received. This would include displaying overall star ratings that do not include negative reviews.  

Note that the final rule does not prevent businesses from removing fake reviews, nor does it prevent companies from contacting consumers who left a negative review to resolve the complaint.  

Fake social influence 

The FTC’s final rule forbids the sale or purchase of fake social media engagement metrics for commercial purposes, such as those that are artificially generated by bots or through compromised accounts. 

The complete list of metrics that companies are banned from buying or selling includes followers, friends, connections, subscribers, views, plays, likes, saves, shares, reposts, and comments.  

Action Items For US Businesses 

1. Implement A Review Verification Process, including mechanisms to verify reviewers have bought or used the product/service. Third-party review platforms with built-in verification systems can help with this.  
2. Establish Clear Disclosure Guidelines: Your policies should require employees, affiliates, and influencers to disclose their relationship to the business in their reviews/testimonials. Since the FTC’s final rule requires ‘clear’ disclosure, it will be helpful to provide examples of what a clear disclosure looks like.  
3. Develop a Response Strategy for Negative Reviews and train your team to follow it.  
4. Remove fake followers from your social media platforms and refrain from paying for fake engagement.  
5. Conduct Regular Compliance Audits. This process should include mechanisms to stay up-to-date on FTC guidance or other regulations, as well as internal audits and consultations with legal counsel where appropriate  

If you need help navigating this change, reach out. Our attorneys are available to assist.  

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