While some praised the new rule, some said that it doesn’t do enough to also put responsibilities on third-party review hosting sites.
Federal Trade Commission (FTC) Chair Lina Khan announced on Oct. 21 that the agency’s prohibition on fake online reviews was taking effect, imposing fines as high as $50,000 for violations.
On social media platform X, Khan encouraged followers to report the proscribed practices at ReportFraud.FTC.gov. In announcing the rule this August, she said that fake reviews “not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors.”
The Public Interest Research Group (PIRG) has said that research points to as many as 30 to 40 percent of online reviews being dishonest in some way, while online reviews inform the basis for 90 percent of online shoppers’ decisions.
In its final rule, the FTC states that the maximum penalty per violation is $51,744, but courts must consider factors under the FTC Act when determining penalties.
Among other things, the final rule prohibits false consumer reviews, buying positive or negative reviews, and suppressing negative reviews.