Federal regulators need to crack down on pretend critiques and different misleading web practices.
The Federal Trade Commission proposed a brand new rule Friday that may ban paying for critiques, suppressing trustworthy critiques, promoting pretend social media engagement and extra. Businesses would even be prohibited from working company-controlled web sites that declare to be unbiased, and different misleading practices like “review hijacking,” which makes critiques for one product seem like they had been written for considerably completely different ones.
If the proposed rule is authorised, following a 60-day public remark interval, violators may face hefty penalties.
“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, stated in an announcement. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”
In Friday’s discover to proposed rulemaking, the FTC famous that it already considers pretend critiques and different misleading actions to be illegal – however that the brand new bans “may increase deterrence against these practices,” permit for civil penalties and assist get monetary compensation to victims, the company stated.
Estimates concerning the portion of critiques on-line which can be pretend vary from 4% to greater than 30%, in line with researchers on the University of Southern California, Los Angeles’ Anderson School of Management. According to 2021 numbers from the World Economic Forum and CHEQ, pretend critiques affect some $152 billion in international spending every year.
In addition to FTC efforts to deal with pretend critiques prior to now – which embody multi-million-dollar settlements with on-line retailers – extra firms say they’re now taking misleading on-line practices severely.
In July of final yr, for instance, Amazon filed a lawsuit in opposition to directors of greater than 10,000 Facebook teams it accused of coordinating pretend critiques in trade for cash or free merchandise – and on Tuesday, the corporate introduced 4 further lawsuits “against fraudsters attempting to mislead Amazon customers and harm Amazon selling partners by facilitating fake reviews.”
Earlier this month, Google introduced authorized motion in opposition to a “bad actor” who posted over 350 fraudulent Google Business profiles and tried to spice up them with greater than 14,000 pretend critiques, the corporate stated.
The FTC’s Friday proposal follows the company’s November announcement to discover rulemaking.
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