Online reviews are regulated more directly than they were a few years ago. The FTC’s Consumer Reviews and Testimonials Rule took effect on October 21, 2024, adding specific federal prohibitions alongside the broader truth-in-advertising requirements of the FTC Act.
The rules matter to sellers, review brokers, marketers, influencers, and marketplace operators, but their responsibilities are not identical.
The FTC rule prohibits businesses from creating or selling certain fake or false reviews and from buying reviews they knew or should have known were fake or false. It also reaches reviews that falsely portray a person’s experience with a product or service.
Companies monitoring online media coverage should remember that AI does not create an exemption. A fabricated review can still create legal risk when it represents a customer or experience that did not exist.
The rule can also reach review brokers and other businesses that create or sell fake reviews.
Businesses may offer an incentive for a review in some circumstances, but the FTC rule prohibits making that incentive expressly or implicitly dependent on a particular positive or negative sentiment.
Someone studying marketplace trend collections may see discount-for-review campaigns that look routine. The distinction is whether the reward is offered for providing feedback or is conditioned on providing favorable feedback.
Separate FTC endorsement guidance also says material connections that could affect how people evaluate an endorsement should be clearly disclosed.
| Practice | Federal Concern | Safer Direction |
|---|---|---|
| Purchased fake review | Prohibited conduct | Use genuine feedback |
| “5 stars for $10” | Sentiment-conditioned incentive | Don’t condition sentiment |
| Employee review | Insider relationship | Clear disclosure |
| Hidden negative reviews | Possible deception | Neutral moderation |
A marketplace that merely hosts consumer reviews is treated differently from a business that writes, buys, or promotes fake material. FTC guidance says the review rule’s hosting exception can apply when a site does nothing more than host consumer reviews, even when it solicits submissions or aggregates star ratings.
That does not make marketplace design irrelevant. FTC staff recommends reasonable procedures for identifying suspicious reviews and transparent practices for collecting, processing, and displaying feedback.
Businesses listed in brand reference directories should also distinguish independent customer reviews from promotional testimonials used in advertising.
A business can respond to criticism, correct inaccurate information, and enforce neutral moderation rules. Problems arise when companies use intimidation, baseless legal threats, or selective moderation to remove unfavorable reviews while preserving favorable ones.
The FTC rule specifically addresses certain review-suppression practices. FTC guidance also notes that displaying reviews in a way that makes negative feedback unusually difficult to find can raise separate concerns under Section 5 of the FTC Act.
Not every negative review must remain online forever. A platform can remove spam, irrelevant content, or material that violates a genuinely neutral policy.
The mistake is applying moderation standards differently because of sentiment. A rule excluding reviews about an unrelated topic should generally be applied to praise and criticism alike.
Another misconception is that adding “incentivized” automatically legalizes a paid five-star campaign. Disclosure does not cure an incentive explicitly conditioned on positive sentiment.
Businesses using review-management agencies, employee testimonials, influencers, or large incentive campaigns should document how reviews are requested and moderated. Contracts with outside agencies should prohibit fabricated reviews and clearly allocate responsibility for disclosures.
If an FTC inquiry, state investigation, competitor complaint, or substantial customer dispute arises, preserve campaign instructions, review records, moderation logs, payments, and communications before making changes.
An incentive may be permitted if it is not conditioned on positive or negative sentiment, but disclosure and platform-specific rules can still apply.
FTC guidance says the federal review rule does not impose a general duty on a mere host to investigate every review, although suspicious activity can still warrant attention.
Neutral removal of genuinely false, irrelevant, or policy-violating content can be permissible. Problems arise when moderation is used deceptively to suppress legitimate criticism.
Reviews influence purchasing decisions, which is why federal rules now address fabricated feedback, sentiment-conditioned incentives, insider relationships, and suppression more directly.
Businesses should know who creates their review content, how incentives are structured, and whether moderation rules operate consistently. A review program that cannot explain those three things is harder to defend.
This article provides general legal information and is not a substitute for advice from a qualified attorney.
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