FTC Warns Companies About Online Review Practices Ahead Of Holiday Shopping Season

The Federal Trade Commission (FTC) has warned 10 companies about potential violations of the Consumer Review Rule, which governs online product reviews and testimonials.

The warnings were issued during the holiday shopping season, when consumers rely heavily on ratings and testimonials to make purchasing decisions.

The Consumer Review Rule prohibits companies from offering compensation or incentives in exchange for reviews that express a particular viewpoint.

Businesses are required to disclose when reviews are written by company insiders or their immediate family members.

The FTC can impose significant penalties for violations, including federal lawsuits and civil fines of up to $53,088 per violation.

The Rule also bans the suppression of certain reviews and the manipulation of company-controlled review platforms.

Companies are prohibited from misusing indicators of social media influence, such as follower counts or view totals, in a misleading way.

The FTC’s warnings highlight its ongoing scrutiny of how businesses collect, present, and promote customer feedback online.