FTC's rule banning fake online reviews goes into effect

A federal rule banning fake online reviews is now in effect.

The Federal Trade Commission issued the rule in August banning the sale or purchase of online reviews. The rule, which went into effect Monday, allows the agency to seek civil penalties against those who knowingly violate it.

"Fake reviews not only waste people's time and money, but also pollute the marketplace and divert business away from honest competitors," FTC Chair Lina Khan said about the rule in August. She added that the 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."

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Specifically, the rule bans reviews and testimonials attributed to people who don't exist or are generated by artificial intelligence, people who don't have experience with the business or product/services, or misrepresent their experience.

It also bans businesses from creating or selling reviews or testimonials. Businesses that knowingly buy fake reviews, procure them from company insiders or disseminate fake reviews will be penalized. It also prohibits businesses from using "unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations."

People can report violations at https://reportfraud.ftc.gov.