The\u00a0Federal Trade Commission\u00a0on Wednesday voted unanimously to ban marketers from using\u00a0fake reviews, like those generated with\u00a0AI technology, and other misleading practices to promote their products and services.<\/p>\n
All five FTC commissioners voted to adopt the final rule, which will go into effect 60 days after it is published in the\u00a0Federal Register, the government\u2019s official catalog of rules and notices.<\/p>\n
Typically,\u00a0rules are published\u00a0within days of their adoption, meaning that consumers can expect to see the FTC\u2019s fake review ban go into effect starting in mid-October.<\/p>\n
\u201cFake reviews not only waste people\u2019s time and money, but also pollute the marketplace and divert business away from honest competitors,\u201d FTC Chair Lina Khan said in a statement.<\/p>\n
Along with prohibiting reviews written by non-humans, the FTC\u2019s rule also forbids companies from paying for either positive or negative reviews to falsely boost or denigrate a product. It also forbids marketers from exaggerating their own influence by, for example, paying for bots to inflate their follower count.<\/p>\n
Violations of the rule could result in fines being issued for each violation, according to the rule. This means that for an e-commerce site with hundreds of thousands of reviews, penalties for fake or manipulated ones could quickly add up.<\/p>\n
With the rise of e-commerce, influencer marketing and generative AI,\u00a0more advertisers\u00a0are turning to automated chatbots like\u00a0ChatGPT\u00a0to quickly generate user reviews for products sold on online platforms.<\/p>\n
The result: Consumers sometimes end up purchasing items based on false praise or misleading promises.<\/p>\n
Fake reviews are already illegal, and some e-commerce companies have tried to push back on the deceptive marketing practice themselves.<\/p>\n
Amazon, for example,\u00a0sued\u00a0over 10,000 Facebook group administrators in July 2022 for brokering fake reviews.<\/p>\n
Amazon did not immediately respond to a request for comment on the\u00a0FTC\u2019s new rule from CNBC.<\/p>\n
Under the\u00a0FTC\u2019s new rule, companies that might have policed themselves in the past will now be subject to stricter government oversight.\u00a0<\/p>\n
Rather than prosecuting individual cases through the Department of Justice, this rule will streamline and strengthen the\u00a0FTC\u2019s ability to enforce the ban in house.<\/p>\n
The announcement came the same day as the White House\u2019s first \u201cCreator Economy Conference,\u201d during which Biden administration officials hosted 100 online influencers and digital content professionals to listen to concerns about the industry.<\/p>\n<\/p>\n
The\u00a0Federal Trade Commission\u00a0on Wednesday voted unanimously to ban marketers from using\u00a0fake reviews, like those generated with\u00a0AI technology, and other misleading practices to promote their products and services. All five FTC commissioners voted to adopt the final rule, which will go into effect 60 days after it is published in the\u00a0Federal Register, the government\u2019s official catalog […]<\/p>\n","protected":false},"author":0,"featured_media":7979,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=7978"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7978\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/7979"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=7978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=7978"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=7978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}