The FTC's final rule banning fake online reviews and testimonials has come into effect

The Final Rule, set to take effect on October 21, 2024, prohibits the sale and purchase of fake consumer reviews and the buying of positive or negative reviews. It also outlines requirements for proper disclosures on online reviews written by company insiders. This formalizes the ban on certain deceptive practices related to consumer reviews and testimonials, categorizing them as unfair or deceptive under the FTC Act.

Companies that sell goods and services to consumers, along with businesses that promote or assist them, should pay close attention to the new rule. The rule strengthens the FTC’s ability to impose civil penalties for false or misleading practices involving online reviews.

The Final Rule is part of the FTC’s broader efforts to regulate online advertising and promote fair competition in the marketplace. In line with this initiative, the FTC previously released updated Endorsement Guides in July 2023, which provided guidelines on the correct use of product endorsements and reviews in advertising.

The Final Rule prohibits businesses, their marketers, and agents from engaging in deceptive practices, such as using fake reviews, suppressing legitimate negative feedback, or paying for positive reviews. It builds on the Proposed Rule and specifically targets deceptive endorsement and review tactics. Additionally, the rule introduces definitions for key terms such as “consumer review hosting” and “fake indicators of social media influence,” clarifying the scope of the regulations.