Misleading Marketing Practices are Out
Last week, the Federal Trade Commission (FTC) voted unanimously to ban fake reviews and other misleading advertising and promoting practices.
Lina M. Khan, FTC Chair, said, “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors. 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.”
What the Rule Prohibits
The new rule lists several practices that will now be banned.
Fake Reviews & Testimonials
This portion of the rule addresses comments, reviews, and testimonials left by people who don’t have any experience with the product or service being reviewed. It includes celebrity or influencer testimonials and AI-generated content. For example, your favorite TikToker won’t be able to review some resort in Tahiti they’ve never visited.
Insider Reviews & Testimonials
Folks working for the company they’re reviewing or are somehow otherwise related to the business, product, or service they’re reviewing must disclose their connection in their review. Businesses are now also prohibited from sharing reviews or testimonials by folks connected as an “officer, manager, employee, or agent.” A good rule of thumb: don’t ask your team to review your business.
Buying Reviews
Companies cannot purchase positive or negative reviews. Yes, some businesses purchase positive reviews for themselves and negative reviews for their competitors. It’s now prohibited under this new rule.
Review Intimidation & Suppression
A business may not use unfounded legal threats, intimidation, or review suppression to prevent or remove negative reviews. Business websites may not misrepresent any reviews, either. For example, let’s say a business has an average rating of 1 star on Google. Their website can’t cherry-pick only the positive portions of their reviews to share on their website to make it look like they have no red flags.
Falsifying Social Media Indicators
This rule prohibits the buying and selling of fake social media metrics such as likes, follows, or views. It includes indicators created by stolen or hijacked accounts and bots. This might be my favorite piece of the rule because I think we’re all pretty tired of seeing so many bot accounts or businesses boasting a big following while a huge percentage of those followers are fake.
What Will the Penalties Be?
Each issue will be reviewed on a case-by-case basis. Violations could result in fines. Thinking about the bigger picture, however, this will hopefully result in unethical behavior around reviews and testimonials slowing down.
When Will the Rule Start?
The new ban will go into effect in roughly 60 days, so that means around mid-October.
Review Management
An important part of digital marketing is review management, which is exactly what it sounds like. It’s about ethically encouraging reviews, responding to reviews professionally, and analyzing reviews to learn how to make your business better. If you’re ready to talk about a digital marketing campaign, get in touch today!