The U.S. Federal Trade Commission (FTC) announced on Wednesday a final rule that will tackle several types of fake reviews and prohibit marketers from using deceptive practices, such as AI-generated reviews, censoring honest negative reviews and compensating third parties for positive reviews.
The decision was the result of a 5-to-0 vote. The new rule will start being enforced 60 days after it’s published in the official government publication called Federal Register.
The FTC’s new rule has been a long time coming. It aims to improve the often untrustworthy online review system and — hopefully — make it easier for people to find reliable reviews. Merchants, especially on Amazon, have been using fake and paid reviews for far too long. Amazon claimed to cease more than 200 million fake reviews in 2020. In 2021, Yelp reported over 950 people were engaging in “deceptive review practices” on the site. Now, the rise of generative AI has made it easier than ever for bad actors to write fake reviews.
The FTC initially proposed the rule on June 30, 2023, following an advanced notice of proposed rulemaking issued in November 2022.
You can read the finalized rule here, but we also included a summary of it below:
- No fake or disingenuous reviews. This includes AI-generated reviews and reviews from anyone who doesn’t have experience with the actual product.
- Businesses can’t sell or buy reviews, whether negative or positive.
- Company insiders writing reviews need to clearly disclose their connection to the business. Officers or managers are prohibited from giving testimonials and can’t ask employees to solicit reviews from relatives.
- Company-controlled review websites that claim to be independent aren’t allowed.
- No using legal threats, physical threats or intimidation to forcefully delete or prevent negative reviews. Businesses also can’t misrepresent that the review portion of their website comprises all or most of the reviews when it’s suppressing the negative ones.
- No selling or buying fake engagement like social media followers, likes or views obtained through bots or hacked accounts.
According to the final rule, the maximum civil penalty for fake reviews is $51,744 per violation. However, the courts could impose lower penalties depending on the specific case.
“Ultimately, courts will also decide how to calculate the number of violations in a given case,” the Commission wrote.
Roughly one week ago during an earnings call, the chief executive addressed ongoing issues with Sonos’ mobile app.
The research suggest that models aren’t hallucinating much less, despite claims to the contrary from OpenAI, Anthropic and the other big AI players.
The U.S. Federal Trade Commission (FTC) announced on Wednesday a final rule that will tackle several types of fake reviews and prohibit marketers from using deceptive practices, such as AI-generated…
Cybersecurity giant Palo Alto Networks is getting a lot of grief for a recent trade show event in which two women posed with lampshades on their heads. The debacle —…
Hiya, folks, welcome to TechCrunch’s regular AI newsletter. This week in AI, a new study shows that generative AI really isn’t all that harmful — at least not in the…
Popular iOS pro photography app Halide launched its new version today with a new feature called Process Zero, which does not use AI in image processing. Lux Optics, the company…
Definity focuses on the data transformation plane on top of a data lake or warehouse, not the data ingestion part of the pipeline.
Analytics and AI giant Databricks reportedly paid nearly $2 billion when it acquired Tabular in June, a startup that was only doing $1 million in annual recurring revenue, according to…
Apple’s exclusive access to the iPhone’s NFC capabilities had been under investigation by the European Commission for years.
Stoke Space is nothing if not ambitious. The five-year-old launch startup has generated a lot of hype due to its bold plans to develop the first fully reusable rocket, with…
Telegram announced on Wednesday that it’s adding new ways for creators to make money on its platform. Most notably, the platform is launching monthly paid subscriptions that users can purchase…
A Texas company says it lost $60 million to a criminal fraud scheme, which the FBI says makes fraudsters billions of dollars every year.
Software as a service (SaaS) is an ever-evolving industry. We’ll talk to some of the brightest minds and leaders in the industry — executives from early- and late-stage SaaS companies,…
What is the right way to build a software business? Many startup advisers say that B2B software should solve one pain point, gain customers, then add features as their company…
Virtuix’s timeline has coincided with a rise of interest around mixed reality, led by Oculus/Meta, HTC and now Apple, among others.
London-based Roto VR’s spinning gaming chair is the first of its kind to boast a “Made for Meta” seal of approval.
EliseAI employs an army of chatbots to text with, email, and respond to calls from renters about things such as apartment tours, maintenance requests, lease renewals and delinquencies.
In crafting laws to regulate AI, like the EU AI Act or California’s SB 1047, policymakers have struggled to come to a consensus on which risks the laws should cover.
Kiteworks, which builds tools to secure email communications and file sharing, has raised $456 million from Insight Partners and Sixth Street Growth.
Hadrian announced they bought Datum Source, a software company founded by SpaceX alums that uses AI to help hardware companies find manufacturing partners.
Spotify will be able to display the pricing for things like Spotify subscriptions and digital goods, including Spotify’s more recently added collection of audiobooks.
India’s Supreme Court has cleared the way for insolvency proceedings to be resumed against Byju’s in a win for U.S. creditors.
Elon Musk-owned X launched Grok-2 and Grok-2 mini in beta today with improved reasoning. The new Grok AI model can now generate images on the X social network, though Grok…
Google Pixel 9 series India launch coincides with the expansion of its sales channels and after-sales support in the country.
General Catalyst and Mars Growth Capital are co-leading the Series G round, which will be closed within a few days, sources familiar with the deal told TechCrunch.
Let’s dive right into what the Google Pixel 9 lineup looks like, how Google’s Gemini AI will be incorporated in the devices, and more.
We rounded up some of the more intriguing AI-related announcements that didn’t get a ton of play, like Pixel Studio.
Ben Affleck and Matt Damon have acquired a screenplay called “Killing Gawker,” which presumably delves into billionaire VC Peter Thiel’s campaign to bury the media outfit for posting excerpts from…
Google launched Gemini Live during its Made by Google event Tuesday. The feature allows you to have a semi-natural spoken conversation, not typed out, with an AI chatbot powered by…
