The FTC has proposed a new rule banning numerous forms of fake reviews online, from outright fabricated ones to those that are sketchily repurposed or secretly manipulated. It may not totally rehabilitate the notoriously unreliable online review ecosystem, but it could help make things a bit more bearable.
This rule has been a long time in the making, which is par for the course at any federal regulator. The FTC’s first case of this type was in 2019, against a merchant that was making misleading claims and paying for fake reviews. Before that, it had taken on “influencer marketing” where a person didn’t disclose that they were being paid to promote a product.
Now the agency is ready to take comprehensive action with rules they first previewed last October and have now put in near-final form. The proposed rule is the result of much research and of consultation with businesses, consumers and even advertising trade organizations that predictably advised the FTC not to bother cracking down on this lucrative business.
The Association of National Advertisers, for instance, says the agency “has not demonstrated evidence of prevalence” and worried that new rules would be “burdensome.” But consumer advocacy organizations, major online companies and common sense argue otherwise — public numbers of fake reviews taken down add up to billions by now, and anyone who has tried to buy a product on Amazon knows it’s completely compromised. The regulators also note “the widespread emergence of generative AI, which is likely to make it easier for bad actors to write fake reviews.”
Even so, the FTC has no doubt carefully tailored the rules it is proposing so that legitimate commerce and acceptable review solicitation (like providing a product for an honest review) are not affected.
You can read the full notice of proposed rulemaking here, but as NPRMs tend to be, it’s quite long and mostly about establishing the need and legality of the rule. The agency summarizes what is newly prohibited in a news release, though, which I have further condensed below:
No selling or soliciting fake reviews. This includes fake profiles, AI generated reviews or anyone who has not actually used a product, and businesses can face penalties if they do this knowingly.
No review hijacking, like shifting reviews for one product to another — one company just had to pay $600,000 for doing this.
No buying positive or negative reviews for your own or other products.
No reviews from company leadership or related persons (family, employees) without disclosure.
No running a review site for your own products and pretending it’s “independent.”
No suppressing reviews via legal threats or intimidation, like saying a bad review is defamation.
No selling fake engagement like followers and video views.
The rule is now open for public comment, and after 60 days the FTC will weigh any new information and adjust the rules accordingly if needed, before putting the finalized rule to a vote.
In response to my questions, the FTC acknowledged the difficulty of getting at companies abroad doing these things, but of course it can hit the companies in the U.S. who pay for the fake reviews. On the definition and detection of AI-generated content and fake engagement the agency had no further details.
This isn’t just Amazon this is now everyone. Perhaps this can be used to prevent Chinese companies from selling on US sites because they are famous for fake reviews.
I wonder if this will affect the reviews that aren’t verified purchases on Amazon? I hope so. Or maybe get rid of the rating system where they can just click and rate but not add any context.
Right now, it appears that online comments on Regulations.gov are not yet available, likely because it’s not yet published in the Federal Register and thus has no due date.
DATES: Comments must be received on or before [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. ADDRESSES: Interested parties may file a comment online or on paper by following the instructions in the Comment Submissions part of the SUPPLEMENTARY INFORMATION section below. Write “Reviews and Testimonials NPRM, R311003” on your comment and file your comment online at https://www.regulations.gov. If you prefer to file your comment on paper, mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue, NW, Suite CC-5610 (Annex B), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street, SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 20024.
These are the summaries of the public Amazon corporate and an Amazon employee’s comments submitted during the November 2022 to January 2023 comment period (Yelp, Google, and Tripadvisor supported rule-making; TrustPilot and Amazon were neutral):
A year or two ago, many Handmade sellers complained about 1-star hit-and-run ratings with no reviews and sometimes NO SALES. (As in — how can someone rate an item which no one has ever bought? We are the only seller of our items.)
Because most Handmade items are low-volume, a single 1* rating can complete kill a product. We asked Amazon to fix the system so non-buyers couldn’t leave ratings, and (cricket, cricket). Reviews are needed to add accountability to the rating.
Fake reviews hurt both sellers and buyers. Amazon doesn’t see that as important enough to fix it, but the FTC does. I hope Amazon gets slapped with a substantial fine.
I agree, I wish Amazon would fix the system voluntarily, but I don’t think they will because it is more profitable to ignore scammers and fake reviews.
I welcome any action that reduces the cesspool of excrement that is the current Amazon product review.
Sadly, in light of recent SCOTUS ruling on WOTUS… This is probably a misguided, unconstitutional overreach by the FTC. Congress and State Legislatures need to consider either legislation, granting express authority to the FTC, and/or exerting pressure on Law Enforcement to go after these crooks utilizing laws already on the books.
If Amazon is concerned that the FTC is overstepping, then Amazon can challenge that through available legal means. They have an expert legal team, with a lot of success–while neither of us are lawyers or constitutional scholars, even if we compete on the regional amateur circuit.