• by Wendy Davis , September 30, 2023

The Federal Trade Commission's proposed regulations aimed at curbing fake reviews could violate the First Amendment by chilling legitimate commercial speech, advertisers told the agency Friday.

Instead of issuing regulations, the FTC should continue to issue guidance and case-by-case prosecutions against companies that attempt to dupe consumers with fake reviews, the Association of National Advertisers argues.

“ANA does not believe that rulemaking is warranted, wise, or a balanced approach,” the group writes, adding that it “is particularly concerned that this rulemaking will have a chilling effect on truthful speech.”

The comments come in response to the FTC's proposal to outlaw a host of practices it says are associated with phony reviews.

In the past, the agency issued guidance regarding online reviews and testimonials, but regulations would be legally binding and would enable the agency to fine first-time violators.

The advertiser organization says some of the proposed rules would infringe on businesses' free-speech rights by targeting truthful and non-misleading posts.

For instance, one proposed regulation would prohibit companies from offering incentives for good reviews.

The ANA says that ban would be too broad, arguing incentivized reviews are not necessarily deceptive, especially when companies explain the circumstances of the review.

The organization asks the FTC to consider a scenario where a business solicits reviews with “enthusiastic and positive” language such as “Tell us how much you loved your visit to John’s Steakhouse and get a $5 coupon.”

“There is nothing inherently wrong with encouraging positivity, so long as the resulting reviews are not deceptive,” the group writes. It adds that “John's Steakhouse” could offer the incentive and avoid duping consumers by issuing a disclaimer like “We asked customers to tell us how much they loved their visit to John’s Steakhouse, and here’s what some of them said! (customers who submitted reviews received a $5 coupon).”

The association also says the FTC lacks grounds for regulations, arguing there is no evidence that phony reviews are “prevalent.” The FTC is only empowered to outlaw practices that are “prevalent” in commerce.

“The record shows in many instances the incidence of 'fake reviews' is something that affects less than 10% of all customer reviews,” the group writes.

Others, including Firefox developer Mozilla, support the FTC's proposal. Mozilla, which earlier this year acquired Fakespot (a company that aims to flag phony reviews), argues that online fakery is prevalent.

“E-commerce markets have been distorted for years by positive or negative reviews bought by the highest bidder, and consumers are the ones who suffer,” Mozilla said in its comments.