Federal regulators are looking to crack down on fake reviews and other deceptive internet practices.
The Federal Trade Commission proposed a new rule Friday that would ban paying for reviews, suppressing honest reviews, selling fake social media engagement and more. Businesses would also be prohibited from running company-controlled websites that claim to be independent, and other deceptive practices like “review hijacking,” which makes reviews for one product appear like they were written for significantly different ones.
If the proposed rule is approved, following a 60-day public comment period, violators could face hefty penalties.
“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”
In Friday's notice to proposed rulemaking, the FTC noted that it already considers fake reviews and other deceptive actions to be unlawful — but that the new bans “may increase deterrence against these practices,” allow for civil penalties and help get financial compensation to victims, the agency said.
Estimates about the portion of reviews online that are fake range from 4% to more than 30%, according to researchers at the University of Southern California, Los Angeles' Anderson School of Management. According to 2021 numbers from the World Economic Forum and CHEQ, fake reviews impact some $152 billion in global spending each year.
In addition to FTC efforts to tackle fake reviews in the past — which include multi-million-dollar settlements with online retailers — more companies say they are now taking deceptive online practices seriously.
In July of last year, for example, Amazon filed a lawsuit against administrators of more than 10,000 Facebook groups it accused of coordinating fake reviews in exchange for money or free products — and on Tuesday, the company announced four additional lawsuits “against fraudsters attempting to mislead Amazon customers and harm Amazon selling partners by facilitating fake reviews.”
Earlier this month, Google announced legal action against a “bad actor” who posted over 350 fraudulent Google Business profiles and tried to boost them with more than 14,000 fake reviews, the company said.
The FTC's Friday proposal follows the agency's November announcement to explore rulemaking.
