The US Federal Trade Commission (FTC) has made some pretty big changes to how companies are allowed to present themselves on the internet, effectively outlawing fake reviews, reviews posted by company employees, fake review sites, AI-generated reviews, etc.
One of the first tests of the FTC’s new policies is a B2B service called Sitejabber, which the Commission has cracked down on.
In a public news post, the FTC charges Sitejabber’s owner GGL Projects, Inc. with violations of the policy. Specifically, it said that Sitejabber’s service asked customers to “rate your online shopping experience” after checkout with a one-to-five star scale and a text box. These “reviews” — of the online checkout experience and not the associated product — were then presented as product reviews for an inflated score.
“Design choices matter when developing these types of products,” wrote commissioner Melissa Holyoak. “And Sitejabber’s design choice here conflated real customer feedback about shopping choices with an actual rating for a product, harming its clients and consumers.”
Violations of the new fake review rules can come with some devastating charges — over $50,000 per violation — but the FTC isn’t dishing out that kind of punishment right away. (Which seems fair as the rules have only been in place for less than a month.) The FTC’s order bars Sitejabber from selling these specific B2B services, or any other deceptive review-gathering tools, in the future. Other violations could come with charges.
This could serve as a test case for the FTC’s new rules, which could be challenged in court and overturned because the FTC’s authority is not as solid as laws passed by Congress. And as The Verge notes, these changes could be short-lived anyway, as the incoming Trump administration is certain to make sweeping cuts to federal oversight of US businesses.
That said, this particular action was unanimously passed by the five-member Commission, including both conservative commissioners with consenting opinions. That indicates broad bipartisan support for the idea that outlawing fake and misleading online reviews, and the ability to prosecute those who post them, is within the FTC’s duties.