Key provisions of the FTC's new rule

The rule covers six core practices that businesses now need to avoid — most of them codifying behavior the FTC has already pursued case-by-case, now consolidated into a single enforceable standard.

  1. Fake reviews and testimonials. Businesses cannot create, buy, or disseminate reviews that misrepresent the experience of a real consumer — including AI-generated reviews and reviews attributed to people who never used the product.
  2. Incentivized reviews. Companies cannot offer compensation conditioned on the review being positive or negative. If an incentive exists, it must be disclosed clearly and conspicuously.
  3. Insider reviews. Officers, employees, and immediate family members must disclose their relationship with the company when leaving a review or testimonial.
  4. Company-controlled review sites. Sites that are operated by or on behalf of a business cannot be presented as independent. Misrepresenting the source of a review is itself a violation.
  5. Fake social media indicators. Buying followers, likes, or other engagement metrics that misrepresent influence is prohibited.
  6. Suppression of negative reviews. Businesses cannot use threats, intimidation, or unjustified legal action to discourage or remove honest negative reviews.

Impact on businesses and consumers

  • Enhanced transparency. Consumers gain a more reliable signal when researching products. Reviews — long among the most influential factors in purchase decisions — become harder to manipulate.
  • Real compliance teeth. Civil penalties of up to $51,744 per violation mean enforcement is no longer a slap on the wrist. Each fake review can count as a separate violation.
  • Fairer competition. Businesses that play by the rules are no longer outflanked by competitors gaming review counts and ratings.

Steps for compliance

  1. Audit your current marketing. Review every channel where customer testimonials, reviews, or social proof appears. Anything you can't trace to a real, unincentivized customer needs to come down or be properly labeled.
  2. Implement remedial measures. If you've used incentivized reviews historically, document them, disclose where required, and tighten the process going forward. Don't quietly delete — that creates its own paper trail.
  3. Train staff and agencies. Anyone responsible for marketing, customer success, or PR needs to understand the new rule. The same applies to outside agencies running campaigns on your behalf — your liability follows the work.
  4. Use trustworthy review platforms. Choose platforms with clear authenticity controls and audit trails. The cost of a slightly more expensive platform is a fraction of one $51,744 violation.

The FTC's new rule is a significant step toward maintaining the integrity of online reviews and testimonials. By prohibiting fake and incentivized reviews, ensuring transparency in insider reviews, and preventing review suppression, the rule enhances consumer trust and promotes fair market practices. Businesses must take immediate action to comply with these new regulations to avoid legal risks and maintain a competitive edge.