On June 30, 2023, the Federal Trade Commission (“FTC”) announced that it would be publishing a notice of proposed rulemaking on the use of consumer reviews and testimonials.

The proposed rule follows FTC’s November 2022 Advance Notice of Proposed Rulemaking. The FTC voted 3-0 to approve the notice of proposed rulemaking, which will be published in the Federal Register and open to public comment.

Specific practices that would be prohibited under the proposed rule and subject to FTC fines or enforcement action include:

• Selling or Obtaining Fake Consumer Reviews, Consumer Testimonials, or Celebrity Testimonials: Businesses would be prohibited from writing or selling consumer reviews or testimonials by someone who does not exist, who did not have experience with the product or service, or who misrepresented their experiences. They would also be prohibited from procuring such reviews or disseminating such testimonials if the businesses knew or should have known that they were fake or false.
• Review Repurposing: Businesses would be prohibited from using or repurposing a consumer review written for one product so that it appears to have been written for a substantially different product.
• Buying Positive or Negative Reviews: Businesses would be prohibited from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative.
• Insider Reviews and Consumer Testimonials: Company employees would be prohibited from writing reviews or testimonials of their employer’s products or services without clearly and conspicuously disclosing their relationship to the business. Additionally, officers or managers would be prohibited from soliciting reviews from company employees or their relatives, depending on whether the businesses knew or should have known of these relationships.
• Company Controlled Review Websites: Businesses would be prohibited from creating or controlling a website that claims to provide independent opinions about a category of products or services that includes its own products or services.
• Review Suppression: Businesses would be prohibited from using unjustified legal threats, other intimidation, or false accusations to prevent or remove a negative consumer review. The proposed rule also would bar a business from misrepresenting that the reviews on its website represent all reviews submitted when negative reviews have been suppressed.
• Selling Fake Social Media Indicators: Businesses would be prohibited from selling false indicators of social media influence, like fake followers or views. The proposed rule also would bar anyone from buying such indicators to misrepresent their importance for a commercial purpose.

This publication is published by the law firm of Ervin Cohen & Jessup LLP. The publication is intended to present an overview of current legal trends; no article should be construed as representing advice on specific, individual legal matters. Articles may be reprinted with permission and acknowledgment. ECJ is a registered service mark of Ervin Cohen & Jessup LLP. All rights reserved.