FTC Cracks Down on Artificial Intelligence-Generated Fake Online Product Reviews

The Federal Trade Commission (FTC) has established new regulations to prevent online platforms from sharing fake reviews and product endorsements, including those produced with artificial intelligence. This rule aims to clamp down on businesses that create or sell products with fake reviews and testimonies. Selling testimonials for e-commerce brands will now face strict enforcement, as platforms are forbidden from purchasing or producing fake reviews. Additionally, the rules prohibit the exchange of fake social media metrics like likes, follows, or views generated by bot accounts. However, the guidelines for social media only apply when the buyer is aware or should have been aware that the engagement is artificially created.

FTC chair Lina M. Khan emphasized the detrimental impact of fake reviews, explaining that they not only deceive consumers but also harm honest competitors and disrupt the market. The final rule is designed to enhance the FTC's ability to combat deceptive advertising, safeguard consumers from deceitful practices, hold businesses accountable for gaming the system, and foster fair and competitive markets. The FTC has been refining these regulations since November 2022, culminating in the publication of the finalized rule this week.

The proliferation of generative AI technologies raised concerns about the ease of creating fake reviews, prompting the need for more stringent measures. The new rule will be effective 60 days after its publication in the Federal Register, following unanimous approval by the commission.