FTC rule banning fake online reviews takes effect

A federal rule banning fake online reviews is now in effect.

The Federal Trade Commission issued a rule in August prohibiting the sale or purchase of online reviews. The rule, which took effect Monday, allows the agency to seek civil penalties against those who knowingly violate it.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” FTC Chair Lina Khan said of the rule in August . She added that the rule “will protect Americans from deception, warn businesses that illegally manipulate the system, and promote fair, honest, and competitive markets.”

Specifically, the rule prohibits reviews and testimonials attributed to people who do not exist or are generated by artificial intelligence, people who do not have experience with the company or products/services, or which distort their experience.

It also prohibits businesses from creating or selling reviews or testimonials. Businesses that knowingly purchase fake reviews, obtain them from internal company members, or distribute fake reviews will be penalized. It also prohibits companies from using “unfounded or baseless legal threats, physical threats, intimidation or certain false public accusations.”

People can report violations at https://reportfraud.ftc.gov.

RELATED STORY | Government issues new rule banning misleading online reviews