FTC Bans Fake Reviews and Social Media Clout
The Federal Trade Commission (FTC) has unanimously voted to ban the use of fake reviews, including those generated by AI, and other deceptive marketing practices. This new rule, which will take effect 60 days after being published in the Federal Register (likely by mid-October), prohibits companies from using nonhuman-written reviews, paying for positive or negative reviews, and artificially inflating their influence with bots. Violations could result in substantial fines, especially for large e-commerce sites.
The rule aims to protect consumers from misleading information and level the playing field for honest businesses. This decision aligns with growing concerns about deceptive practices in the digital marketplace, especially with the rise of e-commerce, influencer marketing, and AI-generated content. The rule strengthens the FTC’s enforcement capabilities, reducing the need for individual prosecutions. Major review platforms like Yelp have expressed support for the rule, which they believe will improve consumer trust in online reviews.