FTC finalizes rule to combat fake reviews, testimonials

The Federal Trade Commission (FTC) has announced a final rule aimed at cracking down on deceptive practices in online reviews and testimonials.

Why we care. Fake reviews can mislead consumers, waste time and money, and unfairly disadvantage honest advertisers. This rule gives the FTC more power to enforce against violators and deter AI-generated fake reviews.

Key details:

• The rule prohibits the sale, purchase, and creation of fake or false consumer reviews and testimonials.
• It bans buying positive or negative reviews and certain undisclosed insider reviews.
• The rule also addresses review suppression and misuse of fake social media indicators.

Between the lines. This move strengthens the FTC’s enforcement capabilities following the Supreme Court’s AMG Capital Management decision, which limited the agency’s ability to seek monetary relief under the FTC Act.

What they’re saying. FTC Chair Lina M. Khan said the rule will “protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

What’s next. The rule will take effect 60 days after its publication in the Federal Register.

The big picture. This rule is part of the FTC’s broader efforts to combat deceptive practices in digital marketing and protect consumers in an increasingly AI-influenced marketplace.