FTC Warns 10 Companies About Possible Violations of the Agency’s New Consumer Review Rule

Federal Trade Commission staff sent letters to 10 companies, warning them of potential violations of the agency’s Consumer Review Rule, which prohibits certain deceptive or unfair conduct related to the use of product reviews in advertising and marketing.

“Fake or false consumer reviews are detrimental to consumers’ ability to make accurate and informed choices about the products they are buying – something of particular importance during the holiday season,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “As consumers increasingly depend on online reviews, the FTC is committed to ensuring companies comply with this Rule.”

The Rule prohibits reviews and testimonials that misrepresent whether a reviewer’s experience was positive or negative, or whether the reviewer used the product or service at all. It also prohibits businesses from conditioning compensation or other incentives on reviewers expressing a particular sentiment, either positive or negative, or from failing to disclose when reviews are written by company insiders or their immediate relatives. The Rule contains additional provisions relating to company-controlled review websites, suppressing certain reviews, and misusing indicators of social media influence like the number of followers or views.

The letters, which were based on consumer complaints and information provided by the companies, are not formal determinations that the recipients have violated the Consumer Review Rule. The letters, however, remind the recipients of their obligations under the Rule, and warn them that Rule violations can result in the filing of a federal lawsuit or other legal action, and civil penalties of up to $53,088 per violation.