FTC Cracks Down on Fake Reviews with Heavy Fines
The Federal Trade Commission (FTC) is proposing a formal ban on fake reviews and testimonials, as well as phony social media metrics. The new rule, which is close to being finalized, includes steep penalties of up to $50,000 for businesses caught buying, selling, or manipulating online reviews. Each phony review could result in a fine, and if a consumer sees it, the penalty could reach up to $1 million. The FTC aims to level the playing field for honest companies by banning businesses from writing or selling fake reviews, obtaining or disseminating known fake reviews, and engaging in review hijacking or offering compensation for reviews. The rule will also prohibit companies from using fake followers and views to inflate their social media numbers.