The key legal and regulatory considerations for soliciting online reviews in the U.S. center on compliance with the Federal Trade Commission’s (FTC) Final Rule on Consumer Reviews and Testimonials, effective October 21, 2024. This rule aims to prevent deceptive practices related to online reviews and testimonials by prohibiting:
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Fake or false reviews: Businesses cannot create, purchase, or disseminate reviews that misrepresent the reviewer’s identity or are fabricated, including AI-generated content falsely presented as genuine consumer experiences.
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Incentivized reviews: Offering compensation or incentives in exchange for reviews expressing a particular sentiment (e.g., positive reviews) is prohibited. However, general incentives for reviews without conditioning on sentiment may be allowed.
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Insider reviews: Officers, managers, or employees must not write or solicit reviews about their own business without clear disclosure of their relationship to the business.
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Company-controlled review websites: It is unlawful to misrepresent a review platform controlled by the business as independent or impartial.
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Review suppression: Selectively hiding or removing negative reviews or manipulating overall review perception is prohibited. Businesses must treat all reviews fairly and avoid threats or intimidation to suppress reviews.
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Fake social media indicators: The sale or use of artificially inflated social media metrics (likes, followers, views) to misrepresent popularity is banned.
Violations of the FTC rule can result in civil penalties up to $51,744 per violation and potential court orders for consumer compensation.
Additional best practices include:
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Soliciting reviews only from genuine customers who have experienced the product or service.
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Avoiding asking staff or insiders to write reviews without disclosure.
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Ensuring transparency and honesty in all marketing and advertising involving consumer reviews.
This regulatory framework reflects the FTC’s broader effort to promote market transparency, protect consumers from deception, and maintain fair competition in online commerce.
In summary, businesses soliciting online reviews in the U.S. must ensure reviews are authentic, not misleading, not incentivized based on sentiment, and that insider or company-controlled reviews are properly disclosed to comply with the FTC’s new rule effective October 2024.
