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Those 10,000 5-star reviews are fake. Now they’ll also be illegal.

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Summary

The Federal Trade Commission has proposed new rules to take aim at businesses that buy, sell, and manipulate online reviews, with a fine of up to $50,000 for each fake review. The rules apply not only to the people who write fake reviews, but also the middlemen who procure them and the companies who pay for them and know, or should have known, they were fake. The rules also forbid review “hijacking” and don’t allow businesses to run a website that claims to host independent reviews while covertly selling its own products and services. The FTC claims that fake reviews have always been against the law because they mislead consumers, and the rules are open for two months of public comment before they could be codified. However, many consumer advocates say that the rules do not address the entire fake-review economy, and the FTC does not have additional enforcement resources.

Q&As

What are the proposed fines for businesses who buy, sell, and manipulate online reviews?
The proposed fines for businesses who buy, sell, and manipulate online reviews are up to $50,000 for each fake review, for each time a consumer sees it.

What tactics are forbidden under the FTC’s proposed rules?
Tactics forbidden under the FTC’s proposed rules include reviews that misrepresent someone’s experience with a product and that claim to be written by someone who doesn’t exist, reviews written by insiders without clear disclosures, review “hijacking,” running a website that claims to host independent reviews while covertly selling its own products and services, and suppressing negative reviews.

What are the challenges facing the FTC in enforcing the fake-review rules?
The challenges facing the FTC in enforcing the fake-review rules include not having additional enforcement resources, potentially facing hurdles trying to go after offending businesses that are based overseas, and Section 230 of the Communications Decency Act, which makes online forums not responsible for the content others publish on them.

How can review sites be more transparent about fake reviews?
Review sites can be more transparent about fake reviews by providing more data and transparency into what led to review content being displayed, and by being more open about when they have taken down fake reviews.

How do the proposed rules affect social media platforms and review sites?
The proposed rules do not extend liability to either social media or review sites themselves, unless the companies are directly involved in procuring the fake reviews. There is also no requirement for sites to verify a user’s identity or that they really used a product.

AI Comments

👍 I'm glad that the Federal Trade Commission is taking a hard stance against businesses that buy, sell and manipulate online reviews. It's great to see that they are proposing new rules to take aim at this insidious practice.

👎 I'm disappointed that the FTC's rules don't do more to hold big review sites like Yelp, Google, Tripadvisor and Amazon directly accountable. It seems like they should be doing more to address the entire fake-review economy.

AI Discussion

Me: It's about how the Federal Trade Commission recently proposed new rules to target businesses that buy, sell, and manipulate online reviews. If the rules are approved, companies could be fined up to $50,000 for each fake review, for each time a consumer sees it.

Friend: Wow, that's a lot of money! What do you think the implications are of these proposed rules?

Me: I think the implications are huge. If the rules are approved, it could have a huge impact in curbing the market for fake reviews and other forms of deceptive advertising. It would also help protect consumers from being misled by fake reviews, and it would put pressure on companies to verify the authenticity of reviews before they post them. Additionally, it could put pressure on social media and review platforms to be more transparent about when they take down fake reviews.

Action items

Sign up for The Tech Friend newsletter to stay informed about the latest developments in the fight against fake reviews.
Report any fake reviews you come across to the FTC.
Share this article with your friends and family to help spread awareness about the dangers of fake reviews.

Technical terms

Fake reviews: Reviews that are not genuine and are written to mislead consumers.
Federal Trade Commission (FTC): The federal government agency responsible for protecting consumers from deceptive and unfair business practices.
Fine: A penalty imposed by a court or other authority for a violation of a law or rule.
Middlemen: A person or company that acts as an intermediary between two other parties.
Hijacking: The act of taking control of a product listing page filled with legitimate reviews and swapping in a different product that those customers never actually used.
Section 230 of the Communications Decency Act: A law that makes online forums not responsible for the content others publish on them.
Fakespot: An AI-based system used to flag fake reviews.
Misinformation: False or inaccurate information.