FTC Chairwoman Lina Khan speaks during a Senate Commerce, Science and Transportation Committee confirmation hearing in Washington, DC, on April 21, 2021.
Graeme Jennings | Bloomberg | Getty Images
Federal Trade Commission on Friday designed new rule that seeks to ban fake online reviews, the most aggressive step yet to crack down on review fraud.
The proposed rule would prohibit companies from buying or selling fake reviews and suppressing negative reviews, as well as “review theft,” which involves redeploying positive reviews from one item for use in other listings and can make new or questionable products appear credible. It also prohibits company executives or insiders from leaving reviews of their products or services without disclosing their relationships.
“The rule would create civil penalties for violators and should help level the playing field for honest companies,” Samuel Levine, director of the FTC’s Office of Consumer Protection, said in a statement.
Fake reviews and review abuse are a persistent problem for online platforms such as Amazon, Google and Yelp. Bad actors often rely on fake reviews to boost their products in search results and increase sales. In some cases, companies offer to pay users to leave negative reviews of a competitor’s product, a tactic called “review sabotage.”
As review fraud has become more common, a dark economy has emerged of online stores promising to supply companies with fake reviews, often for for a few bucks piece. Some of these businesses advertise their services through their websites, while others set to invite only Facebook groups and Telegram chats.
Amazon, which has struggled to combat fake reviews on its third-party marketplace, has more and more went after fake reviewers and facebook group admins in court. It also uses a combination of human moderators and machine learning tools to try to detect suspicious activity on its website.
The FTC has increasingly cracked down on fake reviews because they “deceive consumers who are looking for genuine feedback on a product or service and undercut honest businesses,” the agency said. In February, the FTC filed its first review abuse lawsuit when it was fined supplement maker Bountiful Co., which makes the popular Nature’s Bounty vitamin brand, for using this tactic to boost its Amazon offerings.
In its announcement Friday, the FTC acknowledged that the widespread advent of generative artificial intelligence is likely to make it easier for bad actors to write fake reviews. This was reported earlier by CNBC that some people are already using AI chatbots to write reviews on Amazon.
The proposed rule will not take effect immediately. There is a 60-day public comment period, after which the agency can reconsider the rule based on comments it receives. After some time, the FTC will vote on the final version of its proposal.