What Happened

In August 2024, the United States Federal Trade Commission (FTC) took a decisive step in safeguarding consumer trust by announcing a rule banning fake reviews and testimonials.  This regulation, which went into effect on October 21st, aims to curb the deceptive practices that have plagued the eCommerce industry.  As businesses compete for consumer attention, this rule is a significant move towards ensuring authenticity online.

Why This Matters

Online reviews can be powerfully influential to the average consumer. Many shoppers rely heavily on 5-star user ratings and user testimonials to guide their purchases, especially for products that are available exclusively through digital storefronts. Reliance on these reviews redoubles when considering how many goods are not available in stores and may be sold directly to consumers exclusively through online channels.  

This reliance, however, presents a vulnerability. When the integrity of these reviews is compromised by fake submissions, consumers are misled, and the competitive landscape is skewed.  The FTC’s new rule directly addresses this growing threat by cracking down on businesses that manipulate their standing through dishonest means.

From Marketing Gimmick to Market Manipulation

The importance of the “5-Star Review” in consumer decision-making has created a financial incentive for businesses to aggressively pursue these favorable ratings.  While ethical businesses will strive to earn these favorable reviews by providing superlative products and services, unscrupulous vendors have resorted to stuffing the proverbial ballot box in the hopes of appearing to be a consumer favorite.  Historically this has been achieved through direct compensation, offering cash, gift cards, or coupon codes to solicit positive reviews from buyers. However, in recent years, tactics have expanded to the wholesale fabrication of reviews from consumers who have never existed.  Generative AI coupled with conventional botting tools have only accelerated the flood of fake ratings and authentic-looking user stories, maturing the practice from unethical product promotion to ambitiously shifting market sentiment – and in turn, deceiving consumers.  

The FTC’s new rule sends a clear message: this behavior is no longer tolerated.   Violators will now face enforcement actions and civil penalties.

Follow-Bots, Social Media, and Beyond

The FTC’s rule doesn’t stop at reviews.  It also targets the manipulation of social media through fake follower accounts and view bots.  “Follow Bots” aim to gain additional follower momentum and increase revenue from ads and sponsorships.  A related family of fake accounts include “View Bots” and “Streamer Bots” – which consume media streams from platforms supporting video and audio content, aiming to increase “View Counts” for similar popularity and sponsorship gains.

By banning the sale or purchase of such services, the FTC is drawing a line against these deceptive tactics, whether they occur in product reviews or across social media platforms.

The Common Thread

These seemingly disparate subjects of the recent FTC rule – reviews, followers, and streamer bots – have a key element in common: malicious automation.  Bot operators exploit account creation processes to build armies of fake accounts, which are then used to generate fake reviews, subscribe to streams, or inflate follower counts.  In most instances, these aren’t vendors developing their own bots to self-promote, but rather these are professional operations available for hire to vendors and content creators who might be looking for a fast-track to popularity.  The sale or purchase of such services has been banned as part of the FTC’s newly enacted rule.

Regardless of the details, e-commerce and media platforms have a vested interest in the integrity of their community areas.  Reviews, comments sections, and streams are known targets and require robust anti-bot defense to continue delivering high-quality, trustworthy services. Given the FTC’s recent decision that these professionals may be exposed to civil liability, the data collected from a capable mot mitigation system may prove essential for legal remedies.

The Road Ahead

As the FTC clamps down on these practices, businesses and platforms alike must take responsibility for ensuring the integrity of their digital ecosystems.  Anti-bot defenses and robust fraud detection technologies are no longer just a competitive advantage; they are essential tools in maintaining consumer trust and complying with the law.

With the FTC’s rule now in effect, eCommerce and social media will likely see early enforcement actions in the coming months.  Platforms will need to double down on protecting their review sections, comment threads, and media streams from bot-driven manipulation.  Comprehensive bot mitigation defense can offer businesses the necessary data to protect themselves and their customers while also helping them avoid legal exposure under this new rule.

Continue to watch this space for developments in early enforcement and civil liability related to this landmark ruling.

Fending Off Bots Driving Artificial Demand

Companies can protect themselves from fake reviews caused by bots by implementing effective bot mitigation strategies. Tools like Kasada can help by identifying and blocking malicious activity before it affects a platform. This ensures that reviews reflect genuine customer experiences, protecting both brand reputation and consumer trust. As the FTC increases its focus on tackling deceptive practices, proactive measures like these can help businesses stay ahead and maintain transparency in the digital marketplace.

The post 5-Star Fraud: The FTC’s Ban on Fake Reviews appeared first on Kasada.

*** This is a Security Bloggers Network syndicated blog from Kasada authored by Jesse Martin. Read the original post at: https://www.kasada.io/5-star-fraud-ftcs-ban-on-fake-reviews/