FTC Proposes New Rule Banning Fake Reviews

The Federal Trade Commission has announced a new proposed rule which would prohibit specific deceptive marketing tactics involving consumer reviews or testimonials.  For example, the proposed rule would prohibit the following:

-    Fake Reviews: Businesses would be prohibited from writing, creating, or selling a consumer review that is fake or false, i.e., it is by someone who does not exist, is by someone who did not use or otherwise have experience with the product, or materially misrepresents the reviewer’s experience with the product.  The rule would also prohibit businesses from purchasing consumer reviews that it knows or should know are fake.
-    Buying Positive or Negative Reviews: Businesses would be prohibited from offering compensation or other incentives in exchange for consumer reviews that express a particular sentiment, whether positive or negative.
-    Review Suppression:  Businesses would be prohibited from suppressing reviews by (1) using threats or intimidation to prevent the creation of a consumer review, or to cause the removal of a consumer review, and (2) misrepresenting that its website reviews represent all reviews submitted when negative ones have been suppressed.
-    Misuse of Social Media Influence:  Businesses would be prohibited from selling false indicators of social media influence, like fake followers or views.

The proposed rule would trigger civil penalties for violators and is aimed at “leveling the playing field for honest companies.”

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.

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About Lisa Omoto

Lisa Omoto is an associate in Faruqi & Faruqi, LLP's Los Angeles office and focuses her practice on consumer protection litigation.

Tags: faruqi & faruqi, faruqi law, faruqi blog, faruqilaw, Lisa Omoto, consumer protection litigation, FTC, fake reviews, fraud, consumer rights Lisa Omoto Lisa Omoto
Associate at Faruqi & Faruqi, LLP

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E-mail: lomoto@faruqilaw.com
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