As you may have heard, the FTC has announced its final rule that bans fake product and business reviews. In short, it bans both fake reviews and censoring real reviews (positive or negative). It also bans behavior such as paying someone for positive reviews or threatening those who write negative reviews.
Main takeaways include:
- Fake or disingenuous reviews are barred, including AI-generated reviews; or testimonials from anyone who hasn’t actually used or consumed the product in question.
- Businesses are prohibited from buying or selling reviews, regardless of positive or negative spin.
- Companies can’t buy or sell “fake engagement” such as social media followers, likes, or any engagement that occurs through automated means (e.g., bots).
- Companies are prohibited from publishing review websites that claim to be independent.
- Companies can’t claim that the review portions of their websites contain all or most of their reviews if they suppress negative reviews.
- Companies can’t forcefully delete negative reviews from their own domains, nor initiate action to have negative reviews removed from third-party domains (unless legitimately slanderous).
- Companies can’t communicate threats (legal, physical, or otherwise) nor intimidate anyone in order to prevent or remove negative reviews.
- Officers, owners, or managers can’t write reviews, nor ask/require employees to solicit reviews from their friends and family.
- Anyone otherwise affiliated with a company must disclose their relationship if publishing a review.
Ripple Effects
This obviously has direct impact and ripple effects across the local media, marketing, and commerce sectors, including companies throughout the Localogyverse. Indeed, customer reviews are a key component in local marketing, so several players have emerged to help manage and optimize them.
But one company perhaps impacted more than any other is the ultimate reviews destination: Yelp. Related to the FTC ruling, it has invested a great deal in battling fraud throughout its site. For example, its annual Trust & Safety report highlights the fraudulent activity it’s been able to find and extinguish.
Beyond those existing measures, Yelp has provided an official statement to Localogy Insider from its general Counsel, Aaron Schur, reacting to the FTC ruling. See it in full below and return here for ongoing coverage of the ruling’s aftermath, and how it impacts players throughout the local media sphere.
From Aaron Schur, Yelp’s General Counsel
We are pleased the FTC has announced a new rule to combat deceptive review practices. Yelp has fully supported the FTC’s efforts since the agency began exploring rulemaking in 2022, and provided public comments last year to help further strengthen the final rule. While Yelp’s policies have long prohibited practices outlined in the FTC’s final rule, we believe the enforcement of this new rule will improve the review landscape for consumers and help level the playing field for businesses.
Yelp has long banned compensated reviews, prevented review suppression, and has systems in place to mitigate the potential harm of reviews that may be unreliable, a conflict of interest, or AI-generated. Our actions extend beyond the FTC’s final rule, including proactively posting Compensated and Suspicious Review Activity Alerts on business pages to warn consumers about deceptive review practices; publishing an index of Consumer Alert recipients to help consumers, regulators, and other parties easily identify impacted businesses; alerting consumers to businesses that may be abusing the legal system to intimidate or silence reviewers; and more.
Yelp’s mission is to connect consumers with great local businesses by giving them access to reliable and useful information. As part of that mission, we’ve invested in both technology and human moderation to mitigate misinformation on Yelp, as well as built our platform around fighting fake reviews and other misleading behaviors through scalable solutions. For years, Yelp has also provided the FTC and other regulators with leads on deceptive review conduct.
See the full FTC ruling here.
Header image credit: Tingey Injury Law Firm on Unsplash
