The US Federal Trade Commission (FTC) has taken significant action to combat deceptive online practices with the introduction of new regulations aimed at curbing fake reviews, employee-generated endorsements, fraudulent review platforms, and AI-driven reviews. One of the first cases under these new rules involves Sitejabber, a business-to-business service provider, which the FTC has charged with violating the new guidelines.
The FTC’s charges stem from Sitejabber’s practice of asking customers to rate their online shopping experience with a one-to-five-star scale after checkout, along with a text box for feedback. These reviews, meant to evaluate the shopping experience rather than the product itself, were later presented as product reviews, inflating the product ratings. FTC commissioner Melissa Holyoak criticized this design, which blurred the lines between actual customer feedback and product ratings, ultimately misleading both businesses and consumers.
Violations of the new regulations come with hefty penalties, including fines of $50,000 or more per violation. However, the FTC has yet to impose severe fines, as the rules are still in their infancy. The Commission has prohibited Sitejabber from continuing to offer these deceptive review services. This case could set a precedent for the FTC’s power in regulating fake reviews, though legal challenges are possible, particularly under future administrations. Still, the unanimous support for the FTC’s decision suggests broad bipartisan backing for the need to crack down on misleading reviews in the digital space.
