The U.S. Federal Commerce Fee (FTC) ban on pretend and AI-generated buyer critiques takes impact on Oct. 13, 2024. The ultimate rule, which was introduced in August, goes past a prohibition on pretend product critiques. It additionally prohibits the shopping for and promoting of followers and views on social media.
The rule was within the works for practically two years. The hassle began with an “superior discover of potential rule making” in November 2022. It then traveled by means of the forms, together with public feedback in February 2024, earlier than ultimately changing into a closing rule.
“Pretend critiques not solely waste folks’s money and time, but additionally pollute {the marketplace} and divert enterprise away from trustworthy opponents,” mentioned FTC Chair Lina M. Khan in a press release asserting the ultimate rule. “By strengthening the FTC’s toolkit to battle misleading promoting, the ultimate rule will defend Individuals from getting cheated, put companies that unlawfully sport the system on discover, and promote markets which might be honest, trustworthy, and aggressive.”
1. Individuals depend on on-line critiques to make knowledgeable purchases and evaluate merchandise.
When firms use pretend critiques, shoppers get misled and trustworthy companies lose out.
In the present day @FTC finalized a rule to ban pretend critiques. https://t.co/llOOBvPRHY
— Lina Khan (@linakhanFTC) August 14, 2024
As soon as the rule takes impact, the FTC could have the power to pursue civil penalties in opposition to those that fail to conform. The FTC’s earlier efforts to fight pretend critiques on a case-by-case foundation was stymied by a scarcity of penalties and enforceable guidelines, the fee mentioned in a press release.
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What does the FTC rule for on-line critiques prohibit?
Pretend or false client critiques, client testimonials and celeb testimonials
The rule bans testimonials that declare to be made by somebody who doesn’t exist. This a part of the rule is concentrating on AI-generated pretend critiques specifically. However it additionally consists of:
- Evaluations and testimonials by individuals who didn’t have precise expertise with the enterprise or its services or products.
- Evaluations and testimonials that misrepresent the expertise of the individual giving it.
- A prohibition in opposition to companies creating or promoting such critiques or testimonials and shopping for such critiques, procuring them from firm insiders or disseminating such testimonials when the enterprise knew or ought to have identified the critiques or testimonials had been pretend or false.
Shopping for optimistic or unfavorable critiques
The FTC rule additionally takes purpose at companies that present compensation or different incentives conditioned on writing client critiques. Companies can encourage shoppers to go away critiques, however they can’t inform them what to say. The precise language right here is, “expressing a specific sentiment, both optimistic or unfavorable.” The FTC rule additionally clarifies that the conditional nature of the supply of compensation or incentive could also be expressly or implicitly conveyed.
Insider critiques and testimonials
In its rule, the FTC prohibits sure critiques and testimonials written by firm insiders that fail to obviously and conspicuously disclose the fabric connection to the enterprise. It prohibits critiques and testimonials given by officers or managers of the corporate.
Companies can’t disseminate testimonials the enterprise ought to have identified was created by an officer, supervisor, worker or agent of the corporate.
The rule even takes insider critiques a step additional, by imposing necessities when officers or managers solicit client critiques from their very own instant household, or from workers or brokers — or after they inform workers or brokers to solicit critiques from their kinfolk.
Firm-controlled evaluation web sites
Enterprise can’t misrepresent an internet site or entity it controls that gives unbiased critiques or opinions a few class of services or products that features its personal services or products.
Overview suppression
The FTC is aiming to guard shoppers that go away unfavorable on-line critiques from any backlash. Its new rule prohibits a enterprise from utilizing unfounded or groundless authorized threats, bodily threats, intimidation or sure false public accusations to stop or take away a unfavorable client evaluation.
Companies are additionally barred from misrepresenting the critiques on a evaluation portion of its web site. The enterprise can’t say the evaluation portion of its web site represents all or many of the critiques submitted if critiques had been suppressed because of their scores or unfavorable sentiment.
Misuse of faux social media indicators
The rule bans anybody from promoting or shopping for pretend indicators of social media affect, resembling followers or views generated by a bot or hijacked accounts. This prohibition is proscribed to conditions during which the client knew or ought to have identified that the symptoms had been pretend and misrepresent the client’s affect or significance for a business objective.
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Why we care: On-line critiques and testimonials had been one of many options that promised to democratize the web. You might get the insights opinions straight from shoppers. From client critiques on Amazon to B2B software program evaluation websites, consumers may collect opinions earlier than making buy choices — till the system was inevitably gamed.
The FTC’s rule places some enamel behind enforcement, however will, at greatest, make a really tiny dent in the issue. For one factor, the U.S. FTC solely has jurisdiction in the US, so the plethora of faux critiques flooding the web from different nations is unlikely to gradual, not to mention cease, due to the brand new rule.
