The US Federal Trade Commission (FTC) has made some pretty big changes to how companies are allowed to present themselves online, effectively banning fake reviews, reviews posted by company employees, fake review sites, AI-generated reviews, and so on.
One of the first tests of the FTC’s new policies is a B2B service called Sitejabber, which the FTC has cracked down on.
In a public news release, the FTC charges GGL Projects, Inc., owner of Sitejabber, with policy violations. Specifically, she said Sitejabber’s service asked customers to “rate their 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 submitted as product reviews for an inflated score.
“Design choices are important when developing these types of products,” Commissioner Melissa Holyoake wrote. “Sitejabber’s design choice here conflated real customer feedback about shopping choices with actual product evaluation, to the detriment of its customers and consumers.”
Violations of the new fake review rules could come with some devastating fees — more than $50,000 per violation — but the FTC doesn’t impose that kind of penalty immediately. (Which seems fair considering the rules have only been in effect for less than a month.) The FTC order prohibits Sitejabber from selling these specific B2B services, or any other deceptive review collection tools, in the future. Other violations can come with charges.
This could be a test for new FTC rules, which could be challenged in court and overturned because the FTC’s authority is not as strong as laws passed by Congress. As The Verge points out, these changes may be short-lived anyway, as the incoming Trump administration is certain to make sweeping cuts to federal oversight of US companies.
However, this particular measure was approved by the five-member commission, including conservative commissioners who had concurring views. This indicates broad bipartisan support for the idea that prohibiting fake and misleading online reviews, and the ability to prosecute those who post them, falls within the FTC’s duties.
