Industry / Legal

FTC Outlaws Fake or Paid-For Customer Reviews


Think that store across town with the glowing Yelp reviews shelled out money for them? Now you finally have recourse.

Under a proposed Federal Trade Commission (FTC) rule, posting fake reviews will be illegal. Buying social media followers will be too. And if a company pays someone to review a business positively—or negatively—that could also bring down the hammer.

Like its recently released guidance on influencer marketing, the FTC’s new rule on reviews and testimonials mostly builds on existing policies requiring honesty and transparency. However, it is being codified as a “rule,” which is stronger than guidance and more likely to bring enforcement action. It would prohibit:

Selling or obtaining fake consumer reviews and testimonials. The proposal makes it illegal for businesses to write or post consumer reviews or testimonials by someone who doesn’t exist, or didn’t have experience with the product or service, or misrepresents their experiences. It also outlaws procuring or posting reviews that a business knows (or should know) are fake.

Review hijacking. Businesses cannot use or repurpose a consumer review written for one product to make it appear to have been written for a different product. (The FTC recently took action against a purported review hijacker.)

Buying positive or negative reviews. Businesses will not be allowed to provide incentives to attract consumer reviews expressing a particular sentiment, whether positive or negative.

Insider reviews and consumer testimonials. The proposed rule would prohibit a company’s officers and managers from writing or disseminating reviews or testimonials about its products or services without clearly disclosing their relationship. It also would bar certain solicitations from companies of reviews from employees or their relatives.

Company-controlled review websites. Businesses cannot create or control a website that claims to provide independent opinions about products or services that includes its own products or services.

Review suppression. Businesses will be prohibited from using unjustified legal threats, intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule also would bar a business from claiming that the reviews on its website represent all reviews submitted, if negative comments have been suppressed.

Buying or selling fake social media followers or views.

The FTC voted unanimously to approve the proposed rule. Its notice for public comment can be seen here. After public comments are reviewed, the commission will issue a final rule.

(Photo: Getty Images)

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By: Rob Bates

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