$5 for a good online review? No way, says new FTC rule
The Federal Trade Commission inked a new rule to combat fake online reviews and sham social-media clout. The new rule, finalized this month and set to go into effect later this year, prohibits a slew of practices including: providing incentives for reviews that convey a particular sentimentreviews and testimonials by company insiders that don’t disclose the authors’ connection to the brandsuppressing unflattering reviewsreviews and testimonials attributed to people who haven’t used the product or aren’t real “The role of reviews is increasingly important in almost all of our purchase decisions," said Sandy Jap, a marketing professor at Emory University’s Goizueta Business School.
“Fake reviews are problematic because they are misleading. It’s just creating a noisier environment for consumers to figure out who and what they can trust." The FTC will be able to seek a $51,744 fine per violation.
The agency has investigators and consumer protection staff attorneys who look into allegations and take action when they deem appropriate. Here are four things legal and advertising experts say marketers should know about the new rule.
The new rule prohibits buying fake indicators of social-media influence, such as followers or views made by a bot or hijacked account, to inflate the importance of a brand or product for commercial purposes. “Social proof is such a cornerstone of marketing, and every business wants to have it, especially at the early stages of a business or even launching a new product line," said Robert Freund, an attorney focused on advertising and e-commerce issues at Robert Freund Law.
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