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ARTICLE · 13 SEPTEMBER 2024

FTC's New Rule On Consumer Reviews: Ensuring Compliance With Human- And AI-Generated Content

Frost Brown Todd
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In a significant move aimed at bolstering consumer protection and ensuring fair competition, the Federal Trade Commission (FTC) has finalized the Trade Regulation Rule...

United StatesTechnology
Nilesh (Neal) Patel
Nilesh (Neal) Patel

In a significant move aimed at bolstering consumer protection and ensuring fair competition, the Federal Trade Commission (FTC) has finalized the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, codified under 16 CFR Part 465. As businesses increasingly rely on online feedback to attract and retain customers, quickly understanding and complying with this new FTC rule is critical.

The rule takes effect on October 21, 2024, and violations could result in significant financial penalties. The FTC may seek civil penalties of up to $51,744 per violation.

Key Provisions of the Rule

The new rule prohibits several deceptive practices, including:

  1. Fake reviews and testimonials: Businesses are banned from creating, purchasing, or disseminating fake reviews and testimonials, whether generated by humans or artificial intelligence (GenAI). This includes reviews from nonexistent individuals or those that misrepresent a consumer's experience.

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