FTC Explores New Rule to Combat Fake Reviews

The FTC has made it a priority to combat fake and misleading reviews. For example, just this year alone, the FTC announced a settlement with a retailer over its failure to post negative reviews, announced a settlement with another retailer over its failure to disclose that reviews were incentivized, partnered with six states to file a lawsuit against a company that allegedly purchased fake reviews, and proposed changes to the Endorsement Guides that would provide more detailed guidance on these practices.

Despite these efforts to combat fake and misleading reviews, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection said that the “scourge persists” and announced that the agency is exploring a rule “that would trigger stiff civil penalties for violators.” The FTC doesn’t intend to propose a rule that covers all of the issues addressed in the Endorsement Guides, though. Instead, the FTC is primarily focused on the following topics:

  • Fake reviews, including reviews by people who don’t exist, haven’t used a product, or lie about their experience.
  • Review “reuse fraud,” such as taking reviews about one product or service and using them for a different product or service.
  • Paid reviews, including positive ones about a marketer’s products and negative ones about a competitor’s products.
  • Insider reviews, including those written by employees who don’t disclose their connections to the company.
  • Suppressing reviews, both on a marketer’s own platform and on other platforms.
  • Fake review websites, such as when a marketer sets up a purportedly independent site to review or endorse its own products.
  • Buying followers, subscribers, views, or other indicators of social media influence.
It’s interesting to see the list of practices that the FTC considers to be most problematic. Although the FTC has brought enforcement actions involving many of these practices before, others are new. For example, we’re not aware of any actions involving “reuse fraud” or paying for others to write negative reviews about competitors (though both of those practices are arguably unlawful under current guidance).

Once the Advance Notice of Proposed Rulemaking is published in the Federal Register, the public will have 60 days to submit comments. The FTC will also use public workshop conferences to assist the Commission in drafting a proposed rule.