The Federal Trade Commission (FTC) has enacted a new rule aimed at cracking down on fake online reviews and testimonials. This measure targets businesses that engage in deceptive practices by creating, buying, or selling fake reviews. It also extends to AI-generated reviews and endorsements from people who haven’t used the product.
Key aspects of the rule include:
- Prohibition of fake reviews: Companies cannot create or use testimonials from individuals with no actual experience with their products.
- AI-generated reviews: The use of AI-generated personas to leave fake reviews is explicitly banned.
- Misleading endorsements: Testimonials from company insiders must clearly disclose their connection to the business.
- Penalties: The FTC can impose fines of up to $51,744 per violation for businesses that break the rule.
The rule also targets social media deception by banning the buying and selling of fake followers and views. The rule you’re referring to is FTC Rule 16 CFR Part 255. This rule specifically addresses the use of endorsements and testimonials in advertising and includes provisions related to the prohibition of fake online reviews and testimonials.
The FTC’s new regulation aims to maintain transparency in online reviews, ensuring fair competition and preventing deceptive advertising. You can read the full text of the rule on the Federal Register to see the exact verbiage and understand how it might be enforced here.
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