Say Goodbye to Fake Feedback:
Federal Trade Commission’s Final Rule on Banning Fake Reviews
and Testimonials

By: Tabitha Elligan – Georgia Licensed Managing Attorney with Brownlee Whitlow & Praet

        On August 14, 2024, the Federal Trade Commission (FTC) implemented a final rule to address the rampant issue
of fake reviews and testimonials. According to this new rule, the FTC will impose civil penalties on individuals or
entities that are found to be violating the ban on fake reviews and testimonials. This rule marks a significant milestone
in protecting the accuracy of consumer information and encouraging transparency in the marketplace. Violation of the
Rule will allow the FTC to seek civil penalties of up to $51,744 per violation, along with other relief, such as injunctive relief.
The Rule is effective on October 21, 2024.

                The Federal Trade Commission has identified six categories of prohibited activities, which are as follows:

         1. Fake or False Reviews

      Companies are prohibited from knowingly allowing the publication of fake reviews. This prohibition applies to reviews generated through artificial intelligence as well as those posted by individuals who lack personal experience
with the reviewed product or service. Furthermore, companies are prohibited from engaging in the practice of purchasing reviews if they knew or had reasonable grounds to know that the reviews were deceitful.

2. Buying Reviews Whether Positive or Negative

      Companies are prohibited from compensating individuals in exchange for providing reviews. This prohibition applies regardless of whether the review is positive or negative in nature. Specifically, no individual can receive payment as a precondition for composing a review.

3. Insider Reviews and Testimonials

        It is mandatory for all individuals providing reviews who have a direct affiliation with the company to fully disclose their relationship, meaning that disclosure must be clear and conspicuous. Any failure to disclose such a connection is considered
a serious violation of the FTC regulations. This strict prohibition encompasses situations where any member of the
organization facilitates the provision of a review by an individual associated with the company without disclosing the existing relationship.

4. Company-Controlled Review Websites

        Companies are prohibited from falsely claiming that the website they operate offers independent reviews. This includes those of their own products.

5. Review Suppression

        Companies are prohibited from threatening individuals in order to have unfavorable reviews removed. Additionally,
they cannot falsely claim that a list contains all reviews when they have intentionally withheld negative reviews.

6. Fake Social Media Influence

        Companies are prohibited from engaging in the misrepresentation of their social media influence by artificially inflating their follower or view counts through the purchase of followers or views. This can also include selling social media
indicators to misrepresent their influence, all of which is prohibited.

       Given the inherent nature of this final rule, companies can anticipate heightened traction and enforcement in this domain once the rule takes effect.

     
*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information in this article is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. Viewers of this material should contact their attorney to obtain advice with respect to any particular legal matter. No viewer of this material should act or refrain from acting on the basis of information in this presentation without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this article does not create an attorney-client relationship between the reader and Brownlee Whitlow & Praet, PLLC or any contributing law firms. All liability with respect to actions taken or not taken based on the contents of this article are hereby expressly disclaimed.