A new federal rule aimed at curbing fake online reviews has officially gone into effect.
Issued by the Federal Trade Commission (FTC) in August, the rule prohibits the sale or purchase of online reviews and allows the agency to impose civil penalties on individuals or businesses that knowingly violate its provisions.
FTC Chair Lina Khan emphasized the importance of the rule.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” Khan stated.
She asserted that the rule is designed to protect consumers from deception, hold businesses accountable for dishonest practices, and foster a fair and competitive market environment.
The rule specifically targets several practices, including:
- Attributing Reviews to Nonexistent Individuals: Reviews that are either fabricated or generated by artificial intelligence are banned.
- Misrepresentation of Experience: Reviews from individuals who lack genuine experience with the product or service in question, or who misrepresent their experiences, are not permitted.
- Creation and Sale of Fake Reviews: Businesses are prohibited from generating or selling fake testimonials.
- Penalties for Misuse: Companies that knowingly purchase fake reviews, obtain them from insiders, or distribute them face potential penalties.
- Prohibition of Intimidation Tactics: The rule also bans businesses from using groundless legal threats, intimidation, or false public accusations to silence dissent or manipulate reviews.
The Associated Press and ABC News contributed to this report.
