On August 14, 2024, the Federal Trade Commission (FTC) issued a final rule that prohibits publishing or trading in fake or misleading consumer reviews and testimonials, or engaging in other related deceptive promotional tactics. Notably, under the FTC’s new rule, the commission will be authorized to seek civil penalties against violators.

The rule follows the FTC’s November 2022 advance notice of proposed rulemaking and July 2023 notice of proposed rulemaking, which Wilson Sonsini previously issued guidance on last summer. The rule will become effective on October 21, 2024.

The FTC’s final rule includes prohibitions on:

• Creating, selling, and buying fake or false reviews or testimonials, including AI-generated fake reviews
• Compensating or incentivizing consumers to write reviews that express a particular sentiment (whether positive or negative)
• Using insider (i.e., officer, manager, employee, or agent) reviews and testimonials without a clear and conspicuous disclosure of the insider’s relationship to the business
• Misrepresenting that a company-controlled website or entity provides independent reviews or opinions, other than consumer reviews, about a category of products or services that includes the business’s own products or services
• Suppressing negative reviews, such as by removing negative reviews or using intimidation or unfounded legal threats to prevent negative reviews
• Buying or selling fake indicators of social media influence, such as followers or views generated by a bot or hijacked account

The commission’s new rule raises the stakes for companies that solicit or rely on consumer reviews or testimonials. The FTC is now authorized to seek monetary fines of up to nearly $52,000 per violation of the rule (adjusted annually for inflation). Additionally, liability under the FTC’s new rule has been expanded to encompass companies that “knew or should have known” about certain prohibited conduct. For instance, if a business procures or disseminates fake reviews, that company may be in violation of the FTC’s new rule even if it had no actual knowledge that the reviews were inauthentic. As a result, companies may be required to increase monitoring efforts to avoid non-compliance and possible fines. Businesses should take care to closely review their policies and practices regarding the solicitation and management of reviews and testimonials.

Key Takeaways and Best Practices

1. Solicit Reviews from Actual Consumers. Companies should not request reviews or testimonials from consumers who have not used the product or service. Companies also should not pre-populate or generate draft reviews for customers, including through AI-related technologies.
2. Make Neutral Requests for Reviews. Companies should not offer consumers incentives for positive reviews. Instead, companies should use neutral language when soliciting reviews from consumers. For example, companies should avoid requests that imply that the consumer had a positive experience (e.g., “Tell us how much you loved our product and get a $10 coupon”) and instead opt for more neutral requests (e.g., “Leave us a review and receive $10 off your next order”).
3. Approach All Reviews Neutrally. Companies should not hide or otherwise suppress negative reviews from consumers. Additionally, companies should not discourage consumers from posting negative reviews. If a review contains highly problematic content unrelated to sentiment (e.g., publication of trade secrets, inappropriate content, or fake or false reviews), that content may be removed regardless of the review’s positive or negative sentiment. Companies may also still contact customers to resolve reported issues within a review .
4. Provide Clear and Conspicuous Disclosures. Where disclosures are needed—such as for incentivized or insider reviews or testimonials—companies should ensure that disclosures are “easily noticeable” and “easily understandable” by ordinary consumers. For example, disclosures should not be placed below the fold (e.g., visible only by clicking “more”) or buried within hashtags or links. Instead, businesses must ensure that disclosures stand out from accompanying text or other visual elements so that they are easily noticed, read, and understood.
5. Conduct Active Monitoring. To ensure the legitimacy of reviews solicited by or posted to a company’s website, businesses should monitor for evidence of fake or false reviews and promptly investigate and remove reviews that appear to lack authenticity. For example, an influx of reviews, unnatural language, reference to a product or service outside a company’s offerings, or use of the wrong business name may indicate that one or more reviews are fake or false. When removing reviews due to concerns regarding their legitimacy, companies should take caution to ensure that they apply the same criterion equally to all reviews, regardless of sentiment.