It’s here! The Federal Trade Commission's (FTC’s) final rule banning fake reviews and testimonials, that is. Some of you may remember that I wrote about the proposed rule last year, so I will cover highlights of what has changed below, along with the major points of the rule. But first, why a rule and not just guidance? The easier ability to seek monetary penalties, of course. 

And now, what you need to know:

Changes include:

• A slightly less onerous way of presenting disclosures when communications are made through both visual and audible means: instead of the disclosure having to be presented “simultaneously in both the visual and audible portions of the communication even if the representation requiring the disclosure is made in only one means,” advertisers only have to present the disclosure “in at least the same means as the representation(s) requiring the disclosure.” That could remove the need to have both audio and visual disclosures in some cases.
• Newly added definitions for “consumer review hosting," “distribute fake indicators of social media influence,” “fake indicators of social media influence,” “immediate relative” and “manager,” as well as a significantly revised definition of “unfounded or groundless legal threat.”
• Carve-outs for businesses making generalized solicitations to purchasers to post reviews or testimonials about their experiences with the product, service, or business and reviews that appear on a website or platform as a result of the business merely engaging in consumer review hosting.
• Removal of the prohibition against consumer review repurposing.

Final rule prohibitions:

These will look familiar from the proposed rule, and include prohibiting:

• Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials. The reviewer has to actually exist and must have personal experience with the product or service they are reviewing.
• Buying Positive or Negative Reviews: Businesses can’t provide compensation or other incentives—whether explicitly or implicitly conveyed—for reviews expressing a certain sentiment, whether positive or negative. 
• Insider Reviews and Consumer Testimonials: Employees, officers and managers reviewing their own businesses’ products and services must disclose their material connection to the business, unless the relationship is otherwise clear to the audience. Furthermore, the rule imposes conditions on officers and managers when soliciting reviews from relatives or employees, including requiring the officer or manager to instruct that prospective reviewers to disclose clearly and conspicuously their relationship to the business and to take remedial steps if relative/employee testimonials do not have clear and conspicuous disclosures.
• Company-Controlled Review Websites: A business cannot misrepresent that its owned and operated review websites provide independent reviews on categories that include the business’s own products and services. Consumer reviews on such sites can still be considered independent. 
• Review Suppression: Businesses can’t use legal threats to stop someone from posting reviews or to get someone (or a platform) to remove reviews. Also, businesses cannot misrepresent that the reviews on a review portion of its website represent all or most of the reviews submitted when reviews have been suppressed based upon their ratings or negative sentiment.
• Misuse of Fake Social Media Indicators: Individuals and businesses are prohibited from selling/distributing/purchasing/procuring fake indicators of social media influence; that is, “indicators of social media influence generated by bots, purported individual accounts not associated with a real individual, accounts created with a real individual’s personal information without their consent, or hijacked accounts, or that otherwise do not reflect a real individual’s or entity’s activities, opinions, findings or experiences.”

As always, the devil’s in the details (or, in the FTC’s case, in the kinds of enforcement efforts targeted under this final rule). We will be watching for the first actions brought under this rule once it takes effect—60 days after its publication in the Federal Register—but in the meanwhile, we are already advising clients on the nuances and best practices for how to comply.