FTC rules banning fake reviews go into effect, violators face civil penalties
The United States Federal Trade Commission (FTC) has issued rules to ban fake reviews. These rules prohibit 'AI-generated reviews' and 'paid-for reviews' and also allow for civil penalties for violators.
Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials | Federal Trade Commission
16 CFR Part 465: Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (Final Rule) | Federal Trade Commission
https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-465-trade-regulation-rule-use-consumer-reviews-testimonials-final-rule
FTC's rule banning fake online reviews goes into effect - ABC News
https://abcnews.go.com/US/wireStory/ftcs-rule-banning-fake-online-reviews-effect-115009298
The FTC's rules banning fake reviews were announced on August 14, 2024. After 60 days in the Federal Register, the rules went into effect on October 21, 2024.
Federal Trade Commission announces final rules banning fake reviews and testimonials, violations will be penalized up to 7.6 million yen - GIGAZINE
The new rules prohibit six things: fake or false customer reviews, consumer testimonials, and celebrity testimonials; purchasing positive and negative reviews; insider reviews and testimonials; claiming to be independent on company review sites; suppressing negative reviews; and misrepresenting social media influence through the use of bots or purchasing followers.
In the past, the FTC filed lawsuits for monetary relief to recover unjust profits that companies had obtained by violating trade practices, such as by deceiving consumers. However, in a 2021 lawsuit between AMG Capital Management LLC and the FTC , the Supreme Court ruled differently from the past, finding that the FTC Act does not allow the FTC to seek monetary relief, and the case was dismissed.
The rule allows the FTC to seek civil penalties of up to $51,744 per violation. The FTC said, 'This rule strengthens the FTC's enforcement actions and provides greater deterrence.'
'Fake reviews not only waste people's time and money, they also pollute markets and take business away from honest competitors,' said FTC Chairman Lina M. Khan. 'By strengthening the FTC's toolkit to fight false advertising, we will promote fair, honest, and competitive marketplaces.'
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