The FTC just dropped the hammer on one of the most obnoxious practices in the world of online marketing: fake endorsements. It’s about time, too, because if there’s one thing consumers don’t need more of, it’s getting bamboozled by bogus reviews and celebrity testimonials that have about as much credibility as a late-night infomercial.
So here’s what went down: On Wednesday, the FTC finalized a rule that basically says, “Enough with the BS.” They’ve made it crystal clear that businesses can no longer sell or buy fake reviews, whether they’re glowing or scathing. You know those sketchy reviews that sound like they were written by a robot? Well, they probably were, and now that’s off the table too. The rule even takes aim at companies trying to game the system with AI-generated reviews—because, apparently, it wasn’t enough to just deceive consumers with human-written lies.
But wait, there’s more! The FTC’s new rule also slams the door on insider reviews that don’t disclose connections. No more getting your cousin’s best friend’s roommate to write a five-star review without mentioning that they’re basically on your payroll. And for those businesses that thought they could get away with setting up a fake “independent” review site to sing their own praises? Think again. The FTC’s coming for you.
And if you’re one of those companies that think they can suppress negative reviews by threatening customers or simply making them disappear? Consider this your official wake-up call. The FTC rule makes it clear that messing with authentic feedback is a one-way ticket to penalty town.
Now, here’s where it gets really juicy: the rule doesn’t just target the usual suspects in the retail space; it’s also throwing shade at the influencer industry. We’ve all seen those cringey fake celebrity endorsements plastered across social media. You know, the ones where some B-list actor pretends to use a skincare product they’ve clearly never touched? Yeah, that’s going to be a lot harder to pull off now. The FTC cited an in-depth Better Business Bureau study that exposed fake celeb endorsements, so if you’re thinking about slapping a fake “As seen on Shark Tank” sticker on your product, you might want to rethink that strategy.
Oh, and speaking of AI, the FTC’s rule also specifically bans the use of generative AI tools to cook up fake reviews. It’s like they’ve been reading the tea leaves and know that as soon as one door closes, marketers are already looking for the next trick up their sleeve. But this time, the FTC’s one step ahead, slapping down that nonsense before it even becomes a trend.
This isn’t just about slapping wrists, either. The FTC means business, with the rule reiterating that fines will be issued for each violation. So, for all those e-commerce sites with thousands of questionable reviews? Let’s just say the penalties could add up faster than you can say “deceptive advertising.”
FTC Chair Lina M. Khan summed it up perfectly: “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors.” In other words, this isn’t just about protecting consumers—it’s also about leveling the playing field for businesses that actually play by the rules.
Now, if you’re thinking this is just another chapter in the FTC’s long-running series of consumer protection efforts, you’re not entirely wrong. But there’s a fresh edge to this latest move, a sense that the FTC is done playing nice with those who think they can pull a fast one on the public. The rule will take effect 60 days after it’s published in the Federal Register, so the clock is ticking for those still trying to figure out how to weasel their way around it.
And in case you’re wondering if this might spill over into politics—well, we’ve already seen the kind of drama that can unfold when fake endorsements start circulating. Just look at the recent mess in Duval County, where a lawsuit is accusing state representative Angie Nixon’s campaign of distributing fake endorsement flyers. It’s a perfect example of how the lines between marketing, politics, and outright deception can blur, and why the FTC’s rule is a big deal beyond just the retail space.
The Bigger Picture: The FTC’s Heavy Hand on AI Raises Concerns
But let’s zoom out for a moment, because this rule is about more than just cleaning up the cesspool of fake reviews—it’s also a signal that the FTC is gearing up to flex its regulatory muscles over emerging technologies like AI. And while this might seem like a win for consumers and honest businesses, it also raises some serious concerns about the FTC’s approach and the potential for regulatory overreach.
The rule explicitly bans the use of generative AI tools to create fake reviews and testimonials, which shows that the FTC is acutely aware of the role AI is starting to play in the marketing landscape. But here’s the rub: the FTC is stepping into a regulatory gray area where the laws haven’t quite caught up with the technology. Critics have already pointed out that the FTC’s move to regulate AI without clear legislative backing could be seen as overstepping its authority.
Take, for example, the criticism that emerged when the FTC first started hinting at regulating AI. There’s a growing chorus of voices arguing that the agency might be biting off more than it can legally chew. As attorney Brian Hengesbaugh, a partner at Baker McKenzie, noted, “The FTC is signaling that they want to take a broad approach to AI regulation, but without specific laws, their actions could be vulnerable to legal challenges.” The FTC’s attempt to regulate AI through existing consumer protection laws—rather than waiting for new legislation to be passed—puts the agency on shaky constitutional ground.
This is where things get even more interesting—and potentially problematic. The recent Supreme Court decision in West Virginia v. EPA is a case in point. The ruling significantly curbed the Environmental Protection Agency’s power to regulate greenhouse gas emissions without explicit congressional authorization, setting a precedent that could come back to haunt the FTC. The Supreme Court’s decision suggests that federal agencies need clear and specific mandates from Congress before they can impose new rules, especially when it comes to regulating cutting-edge technologies like AI.
So, while the FTC’s new rule might look like a strong stance against deceptive practices, it could also be seen as the agency overstepping its constitutional bounds. If the rule is challenged in court—and let’s be real, it probably will be—there’s a legitimate question about whether it will hold up in the long run. The FTC is treading into new territory, and without a solid legal foundation, its efforts to regulate AI could be seen as an overreach.
For those of us who believe in the importance of keeping the marketplace honest, this rule might feel like a step in the right direction. But it’s also a reminder that even well-intentioned regulations need to be backed by law—and right now, the legal landscape for AI is anything but settled. If the FTC wants to continue down this path, it might need to push for clearer legislative backing, or it risks having its efforts undone by the courts.
In short, while the FTC’s heavy hand on AI might be good for society, it also raises the stakes in a legal and constitutional showdown that’s just getting started. Marketers, influencers, and anyone else who thought they could skate by with a little creative dishonesty are in for a rude awakening. It’s time to get real, or get out.
