The Federal Trade Commission has unanimously voted to ban marketers from using fake reviews, including those generated with AI technology, and other misleading practices to promote their products and services. The new rule will go into effect 60 days after being published in the Federal Register, likely in mid-October. FTC Chair Lina Khan stated that fake reviews waste people’s time and money, pollute the marketplace, and divert business away from honest competitors.
In addition to prohibiting non-human generated reviews, the rule also bans companies from paying for positive or negative reviews and exaggerating their influence by using bots to inflate follower counts. Violations of the rule could result in fines for each offense, which could add up quickly for companies with numerous reviews. The rise of e-commerce, influencer marketing, and generative AI has led to an increase in the use of automated chatbots to generate fake reviews, leading consumers to make purchases based on false information.
While fake reviews are already illegal, the FTC’s new rule will provide stricter government oversight by streamlining and strengthening enforcement. This comes as some e-commerce companies have attempted to combat fake reviews, such as Amazon suing Facebook group administrators for brokering fake reviews. The new rule will allow the FTC to more effectively enforce the ban on fake reviews in-house, rather than prosecuting individual cases through the Department of Justice. This announcement coincided with the White House’s first “Creator Economy Conference,” where officials listened to concerns from online influencers and digital content professionals about the industry.
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