In recent years, fake reviews have become the bane of businesses large and small. Amazon has waged war against them. In 2022, the tech giant said it had more than 10,000 people worldwide that work to protect its online store from abuse, including fake reviews. On the smaller scale, there are local businesses, who are sometimes bombarded by fake reviews that have nothing to do with them.
Avi Israeli, a dentist and owner of a clinic in New Jersey, told the Associated Press that his business had been hit by fake reviews from people who had never been there. Some confused his clinic with another that had a similar name.
“They have significantly tarnished our reputation, and are unfortunately very difficult, and costly, to get removed,” Israeli said.
A new rule from the Federal Trade Commission, which went into effect this week, wants to tackle situations like this. It targets fake reviews and the companies that buy them and sends a clear message to those who peddle in fake influence: It could cost you, specifically up to $51,744.
Fake reviews and buying reviews. The FTC targets various types of false testimonials with its new rule. These include reviews by people who don’t exist, such as those generated by AI, or reviews that misrepresent the person’s experience. The agency also banned businesses from offering customers money or incentives for writing positive or negative reviews.
“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” FTC chair Lina Khan said in a statement announcing the rule in August.
Insider reviews and review suppression. It also targets what it calls “insider reviews,” or reviews written by people who work for the company they’re reviewing. Reviews that meet these criteria and don’t disclose their relationship to the company are not allowed.
The agency also addressed review suppression, stating that businesses are barred from “using unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove a negative consumer review.”
The impact on online influencers. Notably, the rule also affects social media influencers. It prohibits influencers from buying and selling fake indicators, such as followers, views generated by bots, or views generated by hijacked accounts.
In 2023, Statista found that a majority of Instagram influencers with more than 1 million followers were involved in fraudulent activities to inflate their engagement and follower metrics.
Fines. Under the new rule, the FTC has the authority to fine businesses and bad actors up to $51,744 per violation. As noted by More Perfect Union, fake reviews and misrepresentation of your digital profile were already illegal, but there was no viable enforcement mechanism available. That’s not the case anymore.
Industry support. The rule received support from tech giants like Amazon, which has historically struggled to contain the flood of fake reviews from its online store. In 2022, Amazon sued the administrators of more than 10,000 Facebook groups for peddling fake reviews.
The company has also gone after fake review brokering websites, which offer people free products or payment for reviews. According to Amazon, one fake review broker offered $4 per five-star review with at least 15 words and include photos and videos.
The FTC also received support from Google, Yelp, and the U.S. Public Interest Research Group, a consumer advocacy organization. Teresa Murray, a consumer advocate at the organization, told Reuters in August that 90% of online shoppers make their decisions partly based on reviews.
"We hope this puts fear in companies so they do the right thing, even if it's just because they're afraid of the consequences," Murray said.
Image | Xataka On
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