FTC proposes fines for fake online reviews

The Federal Trade Commission has proposed a new rule that would fine businesses that buy positive reviews, pay to suppress bad ones, and spark fake social media engagement.

"Comments and review fraud and manipulation is incredibly rampant," says Mark DiMassimo, the Founder and Creative Chief of DiGo. "The internet is riddled with B.S. And this is a step in the right direction—having fines up to $50,000 will help with a lot of these sketchy players whose whole business is to fool people, right? They're sort of like consumer frauds that try to fly under the radar."

"Right now, the onus is on the individual reviewers to disclose that kind of thing," adds Ian Baer, Founder and CEO of Soothe. "So this feels to me like a late, insufficient performative reaction with very little teeth where it counts."

According to the consumer advocacy group U.S. PIRG, as many as 40% of online reviews are deceptive or completely fake.

"Millions of consumers are getting duped daily," says Kay Dean, the founder of FakeReviewWatch.Com. "I think no other form of fraud affects more people than online review fraud. And quite often people don't even realize they've been duped by fake reviews."  

The rules however don't crack down on the actual review websites.

"What we need is more true advocacy for the consumer because brands in every category have to close the trust gap," says Baer. "We've been looking at data in category after category, from banking to travel to retail and what people say they're not getting from companies that they really need is trust. 

Consumer platforms claim they've deleted hundreds of millions of suspected fake reviews in the last year alone.