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The last time you hired a plumber or bought a new television, how did you decide who to hire or which TV to buy? If you’re like most consumers today, you looked online for information, especially online reviews and testimonials. And businesses have clearly taken notice. It seems like you can’t buy anything or hire anyone without being asked to write a review, either by the business where you made the purchase or by a third party like Booking.com, Yelp or Google. With this explosion in the importance of online reviews, some businesses try to “game” the system by using deceptive and sometimes outright fraudulent practices to generate artificial positive reviews for themselves or to bomb competitors with false negative reviews. According to the Federal Trade Commission, these practices are now prevalent in the online marketplace. Amazon, alone, reported that it stopped more than 200 million suspected fake reviews in 2020. Google removed 95 million reviews from Google Maps in 2021 and millions more from its Google Play platform. Yelp found that as many as 19 percent of its online reviews were questionable. To combat this problem, the FTC proposed a new rule banning the most widely used deceptive online review practices. Among the proposed banned practices are: (i) writing, creating, selling, or purchasing fake or false consumer reviews and testimonials, or celebrity testimonials where the reviewer does not exist, the reviewer did not actually use the product or service of the business, or where the review falsely represents the reviewer’s actual experience with the product or service; (ii) buying positive or negative consumer reviews expressing a particular sentiment about the product or service; (iii) posting positive reviews written by a company’s officers, managers, employees or agents or any of their relatives without clearly disclosing the reviewer’s relationship to the business; and (iv) suppressing negative reviews through legal threats, physical threats, intimidation or false accusations. If the proposed rule is formally adopted, the FTC will have stronger enforcement mechanisms to stop these deceptive and fraudulent practices through civil monetary penalties and can recover actual losses on behalf of consumers that result from violations. If your business relies on online reviews and testimonials as part of your marketing efforts, you can review the complete proposed rule at https://www.federalregister.
Lawrence Lambert’s office is at 9100 S. Dadeland Blvd., Suite 1500, Miami, FL 33156, located in the Datran Center. His website is www.llambertlaw.com.
