FTC's 5-0 Vote Finalizes Rule Against Fake Online Reviews

The FTC was unanimous in finalizing a rule that will allow it to seek civil penalties against companies sharing fake online reviews, the agency announced Wednesday. Approved 5-0, the rule will help promote “fair, honest, and competitive” markets, Chair Lina Khan said. Amazon, the Computer & Communications Industry Association and the U.S. Chamber of Commerce previously warned the FTC about First Amendment and Section 230 risks associated with the draft proposal (see 2310030064). The rule goes into effect 60 days after Federal Register publication. It allows the agency to seek civil penalties via unfair and deceptive practices authority under the FTC Act. It bans the sale and purchase of fake social media followers and views and prohibits fake, AI-generated testimonials. The rule includes transparency requirements for reviews that people with material connections to businesses write. Moreover, it bans companies from misrepresenting the independence of reviews. Businesses are also banned from “using unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove a negative consumer review,” the agency said.