FTC Cracks Down On AI-Generated Fake Reviews, Fines For Violators
In the emerging era of artificial intelligence (AI), it's getting increasingly difficult to tell the difference between human-generated and AI-generated content. Scammers are using this to their advantage by posting fake reviews of products, and it has caught the attention of the Federal Trade Commission, which has finalized a new rule on false reviews and testimonials.
"Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors," said FTC Chair Lina M. Khan. "By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive."
This is something the FTC has been working towards since at least 2022. Following an informal hearing this past February, the finalized rule has finally come to fruition, and it takes it account feedback that the FTC received from the public.
One of the keys to the rule is it bans businesses from posting false testimonials "by someone who does not exist, such as AI-generated fake reviews." It also prohibits businesses from publishing reviews from actual people (read: not AI-generated) who otherwise have no actual experience with the product or service that is being sold.
There are numerous other restrictions that the new rule addresses, such as buying positive reviews, and also buying negative ones, presumably to thwart false negative impressions on a competitors' product or service.
"The final rule prohibits businesses from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative. It clarifies that the conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed," the FTC states.
Company insiders can still post a review for a product or service, but their affiliation must be made clear. And should someone post a negative review, the FTC prohibits the product or service owner from "using unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove" the negative review.
According to the FTC, case-by-case enforcement without the authority to issue civil penalties proved inadequate to combat deceptive review practices. The FTC's hope is that its new rule on fake reviews, which passed by a unanimous 5-0 vote and does enable it to impose civil (but not criminal) penalties, will finally deter fake reviews. We shall see.
Top image created with Microsoft Copilot (Designer) and Photoshop
