When shopping online, how can you determine whether a product is popular or simply designed to appear that way? Thanks to fake reviews and the inflated influence of social media profiles, that is sometimes not possible. To restore consumer trust in e-commerce, the Federal Trade Commission (FTC) has voted to ban artificial reviews (including those generated by artificial intelligence) and bots that make social media pages appear more trustworthy than they actually are.
The rule, approved unanimously last week by the agency's five commissioners, will take effect 60 days after its publication in the Federal Register. According to the FTC releaseCompanies will be prohibited from posting reviews that misrepresent a real person's experience or involve the invention of a non-existent personality. This includes reviews created through Generative AI Making an offer appear more popular or legitimate than it would otherwise appear. Company-controlled review websites, reviews posted by people within the company, suppressing reviews, and purchasing positive or negative reviews (the latter for a competitor) are also prohibited.
While the FTC already had the authority to investigate and fine companies responsible for the aforementioned cases, the new rule expands its authority to impose civil penalties. It will now have the power to seek monetary compensation from consumers misled by misleading reviews.
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The FTC ban will also prohibit the “misuse of false social media indicators,” such as artificial followers, subscribers, or likes. These indicators can inflate the popularity of a social media profile, such as Instagram influencers or a company’s TikTok pages. A high follower count and regular engagement can make a profile appear more trustworthy or well-liked than it actually is, thus misleading consumers into believing what they say about a product or service.
“Fake reviews not only waste people's time and money, they also pollute the marketplace and divert business away from honest competitors,” said FTC Chairwoman Lina Khan. “By strengthening the FTC's toolkit for combating misleading advertising, the final rule will protect Americans from being misled, put companies that illegally game the system on notice, and promote markets that are fair, honest, and competitive.”
Other organizations are also trying to reduce the impact of fake reviews on consumer decisions. Last month, Mozilla introduced Review Checkera Firefox-built-in tool that analyzes product reviews from Amazon, Best Buy, and Walmart. Each product is given a grade between A and F, indicating whether the reviews are trustworthy, semi-trustworthy, fake, or biased. Articles from Consumer Reports and With cable We also offer tips for identifying fake product reviews.
