The Federal Trade Commission has unanimously voted to ban marketers from using fake reviews, generated with AI technology or other misleading practices, to promote their products and services. The rule will go into effect within 60 days after it is published in the Federal Register, likely in mid-October. Chair Lina Khan stated that fake reviews not only waste consumers’ time and money but also harm the marketplace and honest competitors.
The rule prohibits companies from creating fake reviews, paying for positive or negative reviews, or exaggerating their influence by using bots to inflate follower counts. Violations could result in fines for each offense, potentially adding up quickly for companies with many reviews, such as e-commerce sites.
The use of automated chatbots and AI for generating fake reviews has become more prevalent, leading consumers to purchase items based on false information. While fake reviews are already illegal, some companies, like Amazon, have taken legal action against those involved in brokering fake reviews.
The FTC’s new rule will enforce stricter government oversight on companies that engage in deceptive marketing practices. This rule will streamline and strengthen the FTC’s ability to enforce the ban, rather than prosecuting individual cases through the Department of Justice. The announcement coincided with the White House’s first “Creator Economy Conference,” during which administration officials engaged with online influencers and digital content professionals to address industry concerns.
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