• by Wendy Davis , Yesterday

The Federal Trade Commission this week warned 10 companies that they may be in violation of 2024 regulations that outlawed phony reviews.

"Based on information staff has reviewed, it has reason to believe that your company is violating or has violated the Consumer Review Rule," Janice Kopec, acting associate director of the FTC's ad practices division says in the letters.

"While this letter does not reflect a formal determination that you have violated the Consumer Review Rule, you are advised to immediately cease and desist any conduct that does not comply with the Consumer Review Rule, and, if necessary, take remedial action (such as by removing potentially problematic reviews and testimonials from websites under your control, and making your best effort to have them removed from third-party websites)," Kopec writes.

The letters come around 16 months after the FTC issued regulations banning businesses from purchasing phony reviews, suppressing bad critiques, or engaging in other review-related practices that could dupe consumers.

In the past, the FTC sought to discourage fake reviews by putting out guidance about the type of practices that could result in prosecutions. The regulations, unlike guidance, are legally binding and enable the agency to fine first-time offenders up to $53,088 per violation.

Among other specifics, the regulations prohibit businesses from creating or selling fake reviews generated by artificial intelligence, or by people who haven't actually used the product or service they're endorsing.

The rules also prohibit business from using “unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations” to discourage bad write-ups.

Additionally, the rules also don't allow businesses to offer discounts or other perks in exchange for a good review. (Businesses can still offer incentives to consumers who write reviews, provided the businesses don't suggest that the write-ups should be positive.)