At the mercy of the Federal Trade Commission (FTC), companies that host or promote fake product reviews online could soon face hefty fines.
Fake five-star and rave reviews for low-star consumer goods can deceive consumers and increase profits for businesses, according to the FTC. The FTC is proposing rules to crack down on companies that buy, sell or advertise fake user ratings for their products. product.
According to the FTC, generative AI tools such as ChatGPT can write human-like but deceptive product reviews, potentially exacerbating the problem. New technologies may allow malicious actors to generate large numbers of fake reviews in order to generate unearned income for their products.
Fake reviews hurt consumers by making it difficult for them to obtain genuine, factual information about the products they are considering purchasing.
“Leveling the playing field”
A large number of fake product reviews can increase awareness of the product among consumers while overshadowing products from more trustworthy companies.
“Our proposed rule on fake reviews shows that we are going to great lengths to attack deceptive advertising in the digital age,” FTC Consumer Protection Director Samuel Levin said in a statement. ‘ said. “The rule will impose civil penalties on violators and should help level the playing field for honest businesses.”
The FTC added that a case-by-case crackdown on individual bad guys would likely not be broad enough to deter deceptive behavior.
The proposed enforcement action came at a time when online reviews were largely unreliable. The US PIRG estimates that 30% to 40% of online reviews are “made up or not authentic in some way.”
The group said fake reviews surged during the pandemic as U.S. shoppers made most of their purchases online rather than in stores.
Fake product ratings have serious repercussions. According to US PIRG, nearly 90% of online shoppers rely on reviews to guide their purchasing decisions.
“Not only does this hurt consumers trying to make well-informed purchasing decisions, but fake reviews can also hurt honest businesses who verify that online reviews are genuine. It hurts. Legitimate positive reviews don’t mean much when people lose trust in reviews.So consumers lose.Honesty businesses lose.Dishonest businesses win,” PIRG said. said in the report.
“Review Takeover”
The FTC’s proposed rule would help mitigate much of the harm caused by fake reviews.
First, it makes it illegal to sell and buy fake reviews, rather than reviews written by genuine consumers who have experience using a particular product or service.
The rule also proposes cracking down on so-called “review hijacking.” This consists of reusing genuine consumer reviews written for one product to make it appear to relate to a substantially different product.
Additionally, under the proposed enforcement, company insiders would not be able to review their own products.
Under the rule, companies cannot bribe people to leave positive reviews or blackmail them if they tend to leave negative reviews. Businesses under the proposed rule would be allowed to offer gift cards to customers who leave reviews, unless the business dictates the sentiment expressed.
