The FTC’s rule banning fake online reviews goes into effect

There is now a federal rule in effect banning fake online reviews.

The Federal Trade Commission issued the rule in August banning the sale or purchase of online reviews. The rule, which took effect Monday, allows the agency to seek civil penalties against those who knowingly violate the rule.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and distract companies from honest competitors,” FTC Chair Lina Khan said of the rule in August. She added that the rule “will protect Americans from being cheated, alert companies that unfairly game the system, and promote markets that are fair, honest and competitive.”

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The rule specifically prohibits reviews and testimonials attributed to people that do not exist or that are generated by artificial intelligence, people who have no experience with the company or product/service, or that misrepresent their experience.

It also prohibits companies from creating or selling reviews or testimonials. Companies that knowingly purchase fake reviews, obtain them from company insiders, or distribute fake reviews will be penalized. It also prohibits companies from using “unfounded or unfounded legal threats, physical threats, intimidation or certain false public accusations.”

People can report violations at https://reportfraud.ftc.gov.