The FTC's New Rules for Reviews: A Business Guide

Why FTC Review Guidelines Matter More Than Ever

FTC review guidelines have fundamentally changed with a new final rule effective October 21, 2024. The Federal Trade Commission now has improved enforcement powers to combat fake reviews, review suppression, and other deceptive practices that pollute the online marketplace.

Key FTC Review Guidelines at a Glance:

1. Fake Reviews Banned - No creating, buying, or selling fake reviews or testimonials

2. Review Suppression Prohibited - Can't suppress negative reviews through threats or intimidation

3. Insider Disclosure Required - Employees and family must disclose their relationship when reviewing

4. No Sentiment-Based Incentives - Can't condition review incentives on positive ratings

5. Independent Site Misrepresentation Banned - Company-controlled review sites can't claim independence

The rule allows the FTC to seek civil penalties up to $51,744 per violation for businesses that knowingly break these guidelines. As FTC Chair Lina M. Khan stated, fake reviews "pollute the marketplace and divert business away from honest competitors."

This represents a major shift from non-binding guidance to legally enforceable regulations with direct financial consequences. For businesses, understanding these rules isn't just about compliance—it's about building authentic customer relationships and maintaining a competitive advantage.

I'm Maury Blackman. With over two decades leading high-growth tech companies like Premise Data, Accela and working with countless tech companies, I've seen how consumer trust drives success. My experience navigating regulatory landscapes gives me unique insight into how these FTC review guidelines will impact your business.

What is the New FTC Rule on Consumer Reviews and Testimonials?

The FTC's new final rule, the Trade Regulation Rule on the Use of Consumer Reviews and Testimonials, became law on October 21, 2024. Codified under 16 CFR Part 465, it's a major shift: what was once guidance is now a legally binding regulation with real teeth.

This rule massively shifts FTC enforcement. Previously, seeking monetary penalties was difficult. Now, the FTC can directly pursue civil penalties up to $51,744 per knowing violation.

The rule targets fake reviews, review suppression, and other deceptive practices that poison online marketplaces and prevent consumers from making informed decisions.

Differentiating the New Rule from the FTC's Endorsement Guides

This new rule doesn't replace the existing FTC's Endorsement Guides; it works alongside them as a specialized enforcement tool.

The Endorsement Guides are broad principles for all endorsements, offering interpretive guidance on truthful advertising under the FTC Act.

The new rule, however, is laser-focused on specific bad behaviors in the review space, like creating fake reviews, and attaches direct, hefty fines.

Feature	New FTC Rule (16 CFR Part 465)	FTC's Endorsement Guides (16 C.F.R. Part 255)
Nature	Legally enforceable Trade Regulation Rule	Interpretive guidance on the FTC Act
Enforcement	Direct civil penalties up to $51,744 per knowing violation	Violations are considered violations of the broader FTC Act
Scope	Specific prohibitions related to fake reviews, suppression, insider reviews, company-controlled review sites, fake social media indicators	Broader guidance on all forms of endorsements and testimonials, including disclosures of material connections
Effective Date	October 21, 2024	Updated June 29, 2023

Businesses now have both the broad ethical framework from the Endorsement Guides and specific, enforceable rules that carry immediate financial consequences.

Who Can Be Held Liable?

The new FTC review guidelines clearly define who is responsible. The FTC wants everyone in the review ecosystem to understand their role.

Businesses are liable if they create, buy, or benefit from fake reviews. This applies to companies of all sizes.

Advertising agencies and PR firms can face penalties if they manage campaigns involving review manipulation.

Review brokers and reputation management companies that sell fake reviews or promise to suppress negative feedback are explicitly targeted.

Individuals who sell fake reviews as a business are also liable.

Ordinary consumers are generally protected. The FTC is focused on the commercial side of review manipulation, not genuine customer feedback.

Consumer Review vs. Testimonial

The FTC makes an important distinction between a consumer review and a testimonial that affects how the rules apply.

A consumer review is typically unsolicited feedback from a regular customer on a platform like Amazon or Yelp.

A testimonial is an advertising message designed to promote a product, such as a celebrity endorsement or a customer quote used in marketing.

Incentivized reviews can blur this line. A review rewarded with an incentive may be considered a testimonial, especially if used in marketing. Celebrity and influencer endorsements are almost always testimonials.

This distinction matters because disclosure requirements and prohibitions can apply differently depending on the classification.

Key Prohibitions: What Your Business Can No Longer Do

The new FTC review guidelines draw clear red lines around deceptive practices that undermine consumer trust.

The five core prohibitions target the most egregious practices: fake reviews, review suppression, insider reviews without disclosure, review hijacking, and fake social media indicators. Each carries the potential for civil penalties up to $51,744 per knowing violation, making compliance financially essential.

Selling, Buying, or Creating Fake Reviews

This prohibition strikes at the heart of review fraud. The FTC review guidelines make it clear: any review that doesn't reflect a real person's genuine experience is banned.

The rule covers the entire fake review ecosystem. Selling, buying, or creating them is prohibited. This includes paying third-party services for testimonials or offering products for guaranteed five-star ratings. These loopholes are now closed.

AI-generated fake reviews are explicitly banned. Using AI to create reviews that claim to be from real people violates the rule.

The "should have known" standard matters. You can be liable if you procured or disseminated reviews you should have recognized as false. Turning a blind eye to red flags—like receiving 50 five-star reviews overnight—won't protect you.

Suppressing Negative Reviews

The new rule recognizes that negative reviews are part of an honest marketplace.

Intimidation and unfounded legal threats are now prohibited. You can't use legal intimidation, physical threats, or false accusations to force customers to remove negative reviews. This doesn't prevent legitimate legal action against defamatory content, but threats must be grounded in actual legal violations.

You can't cherry-pick reviews and call them complete. If you display customer reviews on your site and claim they represent "all" feedback while hiding negative ones, you're violating the rule. Misrepresenting that displayed reviews are "all" reviews is deceptive.

Review moderation must be fair and equal. Your policies can't subject negative feedback to greater scrutiny than positive reviews. Unequal moderation is prohibited.

If you encounter review fraud targeting your business, you can always report fraud to the FTC directly.

Misusing Insider and Company-Controlled Reviews

Transparency is crucial for reviews from insiders or on company-controlled platforms. The FTC wants consumers to know the source of these reviews.

Employee and family reviews need clear disclosure. When your employees, family members, or business partners review your products, their connection must be clearly and conspicuously disclosed. Undisclosed insider reviews violate the new rule.

Company-controlled review sites can't masquerade as independent. If you own or control a website that reviews your products, you must clearly disclose your ownership.

Misrepresenting a company-controlled review site as independent is prohibited. The disclosure must be prominent, not buried in a footer.

Navigating the Nuances: Incentives, AI, and Review Display

The new FTC review guidelines also offer guidance on nuanced areas like incentivized reviews, AI-generated content, and review display practices. Getting these right is key to your compliance strategy.

How to Handle Incentivized Reviews Under the New FTC Review Guidelines

Offering incentives for reviews isn't banned, but the rules are much stricter.

The biggest change? You cannot condition incentives on positive sentiment. Promotions like "Leave us a 5-star review for 10% off" are now explicitly prohibited. The incentive must be neutral, allowing customers to share their honest experience, good or bad.

Disclosure is absolutely mandatory for any incentive. The disclosure must be clear and conspicuous, so customers can't miss it. A simple "#sponsored" or "#incentivized" at the beginning of a social media post can work if it's prominent.

An incentivized review is more like a testimonial in an advertisement, and the FTC review guidelines require the same level of transparency.

Even with disclosure, you can't pay specifically for 5-star reviews. The goal is authentic feedback, not purchased praise.

For businesses looking to get this right, the FTC has created a helpful resource: Soliciting and Paying for Online Reviews: A Guide for Marketers.

The Role of AI-Generated Content

AI is changing content creation and posing challenges to review authenticity. The FTC review guidelines are forward-thinking about AI's role.

AI-generated fake testimonials are explicitly banned. Using AI to create reviews from non-existent people or synthetic personas is a violation.

However, you can use AI to summarize genuine customer reviews or analyze sentiment, as long as you're ensuring AI content accuracy. AI-powered summaries must fairly represent both positive and negative feedback. You can't program AI to only highlight glowing comments.

Disclosure is crucial when AI plays a significant role. Transparency about AI's involvement helps maintain trust. The smartest approach is implementing strong AI governance protocols with human oversight and clear accountability.

Requirements for Displaying Reviews

How you display customer feedback impacts consumer perception. The FTC review guidelines emphasize fairness and honesty in presenting this information.

You cannot misrepresent partial feedback as complete feedback. Showcasing only positive reviews while claiming they represent "all" customer opinions is misleading.

This doesn't mean you can't organize reviews. You can highlight "favorite" reviews or sort them by rating, as long as you're not presenting a curated selection as the complete picture.

Equal treatment is essential in review moderation. Your policies must be applied consistently to both positive and negative feedback.

The spirit of these requirements is simple: give consumers the information they need. If you use filters, make sure customers understand they're seeing a filtered view.

For platforms that host reviews, the FTC offers detailed guidance in their Featuring Online Customer Reviews: A Guide for Platforms.

The bottom line is transparency. When customers understand how reviews were collected and presented, you build trust.

Ensuring Compliance with the New FTC Review Guidelines

The new FTC review guidelines are legally binding rules. Compliance isn't just a necessity; it's an opportunity to build a more authentic and profitable business.

From my experience scaling tech companies, I learned that regulatory compliance is a competitive advantage. Businesses that accept transparency thrive. The FTC's new rule levels the playing field for honest operators.

Penalties for Non-Compliance

The penalties for non-compliance are significant.

Civil penalties can reach up to $51,744 per violation. For example, buying 100 fake reviews could theoretically lead to over $5 million in fines.

The standard is a "knowing violation," which includes situations where you should have known you were breaking the rules. Ignorance is not a defense.

This gives the FTC improved enforcement authority. They now have a direct path to hit violators with monetary penalties.

The message is clear: the cost of non-compliance far exceeds the investment in doing things right.

Actionable Steps for Your Business

Building compliance into your operations is achievable. Here's how to start:

Conduct a comprehensive audit of your review and testimonial processes. Check how you collect and display feedback, and review any AI tools in use.

Implement clear disclosure policies that are impossible to miss for insider reviews and incentives.

Reevaluate your incentive programs to ensure any rewards are neutral and not tied to positive ratings.

Strengthen your review moderation by applying the same standards to all feedback, positive or negative. Use human oversight for any AI moderation.

Monitor third-party relationships with agencies or review management companies. You can be held liable for their violations.

Educate your entire team on these new rules with regular training.

These steps help you avoid penalties and build a more trustworthy brand. In my experience, businesses that proactively address compliance gain market share while competitors struggle to adapt.

For a deeper dive, check out The High Cost of Review Fraud: How Fake Reviews Hurt Consumers and Businesses.

Frequently Asked Questions about the FTC's Review Rule

The new FTC review guidelines have sparked many questions. Here are answers to the most common concerns from business leaders.

Can I ask only my happy customers to leave a review?

While the new rule doesn't explicitly forbid this, the practice could be considered deceptive under the broader FTC Act.

Why? Selectively asking only satisfied customers creates a misleading picture of overall customer satisfaction. It may wind up distorting or otherwise misrepresenting what consumers generally think about your business.

The safer, more ethical approach is to ask all customers for their honest feedback. This builds genuine trust with potential customers who can see the complete picture.

Can I delete a negative review if it's unfair or contains false information?

Yes, you can refuse to publish reviews that are patently false or about the wrong business. The same goes for spam or irrelevant content.

However, your policies for excluding reviews must be applied equally to positive and negative reviews. You can't have a stricter standard for negative feedback.

What you cannot do is delete truthful negative reviews simply because they are unflattering. Deleting truthful negative reviews is review suppression, which is now prohibited.

The rule also forbids using unfounded legal threats or intimidation to pressure reviewers into removing negative feedback. If you challenge a review legally, you must have legitimate grounds.

Do I have to disclose if I give a customer a coupon for leaving a review?

Yes, this is non-negotiable. Incentives must be clearly and conspicuously disclosed—not buried in fine print.

The disclosure needs to be "unavoidable," so customers immediately understand the reviewer received something for their feedback. A simple statement like "This reviewer received a 10% discount coupon" works.

Crucially, the incentive cannot be conditioned on the review being positive. You can offer a discount for "any honest review," but not for a "5-star review." That's a direct violation of the new FTC review guidelines.

Failing to disclose incentives can violate the FTC Act, and conditioning them on positive sentiment could cost you up to $51,744 per violation. Transparency is easier and builds more authentic customer relationships.

Conclusion

The new FTC review guidelines are more than regulations; they're a chance to rebuild trust in the digital marketplace. As someone who has built companies on authentic relationships, I see this as an opportunity.

These regulations level the playing field. When fake reviews disappear and authentic voices rise, businesses that truly serve their customers will shine.

The stakes are high in the $500 billion online review market. Every fake review erodes trust in the entire system.

At The Transparency Company, we've seen how authentic customer stories drive real growth. By embracing these FTC review guidelines, businesses invest in something invaluable: genuine customer relationships built on trust.

The path forward is clear: restore integrity, support fair competition, and prioritize consumer protection. This is about building an ecosystem where honest companies thrive and consumers feel confident.

The work starts now. Every business that chooses transparency over manipulation helps create a marketplace worthy of our trust.

Ready to be part of the solution? Learn more about the high cost of review fraud and how to combat it and find how your business can lead the charge toward transparency.