Trade Regulation Rule on the Use of Consumer Reviews and Testimonials
16 CFR PART 465
Date: August 14, 2024
SUMMARY:
The Federal Trade Commission (“FTC” or “Commission”) is issuing this final rule and Statement of Basis and Purpose (“SBP”) relating to certain specified unfair or deceptive acts or practices involving consumer reviews or testimonials. This final rule, among other things, prohibits selling or purchasing fake consumer reviews or testimonials, buying positive or negative consumer reviews, certain insiders creating consumer reviews or testimonials without clearly disclosing their relationships, creating a company-controlled review website that falsely purports to provide independent reviews, certain review suppression practices, and selling or purchasing fake indicators of social media influence.
CITATION:
Title 16- Commercial Practices
Chapter I- Federal Trade Commission
Subchapter D- Trade Regulation Rules
Part 465- Rule on the Use of Consumer Reviews and Testimonials
465.1 Definitions.
465.2 Fake or False Consumer Reviews, Consumer Testimonials, or Celebrity Testimonials.
465.3 [Reserved]
465.4 Buying Positive or Negative Consumer Reviews.
465.5 Insider Consumer Reviews and Consumer Testimonials.
465.6 Company-Controlled Review Websites or Entities.
465.7 Review Suppression.
465.8 Misuse of Fake Indicators of Social Media Influence.
465.9 Severability
Authority: 15 U.S.C. 57a
§ 465.1 Definitions.
(a) Business means an individual who sells products or services, a partnership that sells products or services, a corporation that sells products or services, or any other commercial entity that sells products or services.
(b) Celebrity testimonial means an advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a well-known individual who purchased, used, or otherwise had experience with a product, service, or business.
(c) Clear and conspicuous means that a required disclosure is easily noticeable (i.e., difficult to miss) and easily understandable by ordinary consumers, including in all of the following ways:
(1) In any communication that is solely visual or solely audible, the disclosure must be made through the same means through which the communication is presented. In any communication made through both visual and audible means, such as a television advertisement, the disclosure must be presented in at least the same means as the representation(s) requiring the disclosure.
(2) A visual disclosure, by its size, contrast, location, the length of time it appears, and other characteristics, must stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood.
(3) An audible disclosure, including by telephone or streaming video, must be delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand it.
(4) In any communication using an interactive electronic medium, such as social media or the Internet, the disclosure must be unavoidable. A disclosure is not clear and conspicuous if a consumer must take any action, such as clicking on a hyperlink or hovering over an icon, to see it.
(5) The disclosure must use diction and syntax understandable to ordinary consumers and must appear in each language in which the representation that requires the disclosure appears.
(6) The disclosure must comply with these requirements in each medium through which it is received, including all electronic devices and face-to-face communications.
(7) The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication.
(8) When the representation or sales practice targets a specific audience, such as children, the elderly, or the terminally ill, “ordinary consumers” includes members of that group.
(d) Consumer review means a consumer’s evaluation, or a purported consumer’s evaluation, of a product, service, or business that is submitted by the consumer or purported consumer and that is published to a website or platform dedicated in whole or in part to receiving and displaying such evaluations. For the purposes of this part, consumer reviews include consumer ratings regardless of whether they include any text or narrative.
(e) Consumer review hosting means providing the technological means by which a website or platform enables consumers to see or hear the consumer reviews that consumers have submitted to the website or platform.
(f) Consumer testimonial means an advertising or promotional message (including verbal statements, demonstrations, or depictions of the name, signature, likeness, or other identifying personal characteristics of an individual) that consumers are likely to believe reflects the opinions, beliefs, or experiences of a consumer who has purchased, used, or otherwise had experience with a product, service, or business.
(g) Distribute fake indicators of social media influence means the distribution of fake indicators of social media influence to individuals or businesses who could use the indicators to misrepresent their influence.
(h) Fake indicators of social media influence means 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.
(i) Immediate Relative means a spouse, parent, child, or sibling.
(j) Indicators of social media influence means any metrics used by the public to make assessments of an individual’s or entity’s social media influence, such as followers, friends, connections, subscribers, views, plays, likes, saves, shares, reposts, and comments.
(k) Manager means an employee of a business who supervises other employees or agents and who either holds the title of a “manager” or otherwise serves in a managerial role.
(l) Officers include owners, executives, and managing members of a business.
(m) Purchase a consumer review means to provide something of value, such as money, gift certificates, products, services, discounts, coupons, contest entries, or another review, in exchange for a consumer review.
(n) Reviewer means the author or purported author of a consumer review.
(o) Testimonialist means the individual giving or purportedly giving a consumer testimonial or celebrity testimonial.
(p) An unfounded or groundless legal threat is a legal threat based on claims, defenses, or other legal contentions unwarranted by existing law or based on factual contentions that have no evidentiary support or will likely have no evidentiary support after a reasonable opportunity for further investigation or discovery.
§ 465.2 Fake or False Consumer Reviews, Consumer Testimonials, or Celebrity Testimonials.
(a) It is an unfair or deceptive act or practice and a violation of this part for a business to write, create, or sell a consumer review, consumer testimonial, or celebrity testimonial that materially misrepresents, expressly or by implication:
(1) that the reviewer or testimonialist exists;
(2) that the reviewer or testimonialist used or otherwise had experience with the product, service, or business that is the subject of the review or testimonial; or
(3) the reviewer’s or testimonialist’s experience with the product, service, or business that is the subject of the review or testimonial.
(b) It is an unfair or deceptive act or practice and a violation of this part for a business to purchase a consumer review, or to disseminate or cause the dissemination of a consumer testimonial or celebrity testimonial, about the business or one of the products or services it sells, which the business knew or should have known materially misrepresented, expressly or by implication:
(1) that the reviewer or testimonialist exists;
(2) that the reviewer or testimonialist used or otherwise had experience with the product, service, or business that is the subject of the review or testimonial; or
(3) the reviewer’s or testimonialist’s experience with the product, service, or business that is the subject of the review or testimonial.
(c) It is an unfair or deceptive act or practice and a violation of this part for a business to procure a consumer review from its officers, managers, employees, or agents, or any of their immediate relatives, for posting on a third-party platform or website, when the review is about the business or one of the products or services it sells, and when the business knew or should have known that the review materially misrepresented, expressly or by implication:
(1) that the reviewer exists;
(2) that the reviewer used or otherwise had experience with the product, service, or business that is the subject of the review; or
(3) the reviewer’s experience with the product, service, or business that is the subject of the review.
(d) However, paragraphs (b) and (c) of this section do not apply to:
(1) reviews or testimonials that resulted from a business making generalized solicitations to purchasers to post reviews or testimonials about their experiences with the product, service, or business; or
(2) reviews that appear on a website or platform as a result of the business merely engaging in consumer review hosting.
§ 465.3 [Reserved]
§ 465.4 Buying Positive or Negative Consumer Reviews.
It is an unfair or deceptive act or practice and a violation of this part for a business to provide compensation or other incentives in exchange for, or conditioned expressly or by implication on, the writing or creation of consumer reviews expressing a particular sentiment, whether positive or negative, regarding the product, service, or business that is the subject of the review.
§ 465.5 Insider Consumer Reviews and Consumer Testimonials.
(a) It is an unfair or deceptive act or practice and a violation of this part for an officer or manager of a business to write or create a consumer review or consumer testimonial about the business or one of the products or services it sells that fails to have a clear and conspicuous disclosure of the officer’s or manager’s material relationship to the business, unless, in the case of a consumer testimonial, the relationship is otherwise clear to the audience.
(b)(1) It is an unfair or deceptive act or practice and a violation of this part for a business to disseminate or cause the dissemination of a consumer testimonial about the business or one of the products or services it sells by one of its officers, managers, employees, or agents, which fails to have a clear and conspicuous disclosure of the testimonialist’s material relationship to the business, when the relationship is not otherwise clear to the audience and the business knew or should have known the testimonialist’s relationship to the business.
(2) However, paragraph (b)(1) of this section does not apply to:
(i) generalized solicitations to purchasers for them to post testimonials about their experiences with the product, service, or business, or
(ii) merely engaging in consumer review hosting.
(c)(1) It is an unfair or deceptive act or practice and a violation of this part for an officer or manager of a business to solicit or demand a consumer review about the business or one of the products or services it sells from any of their immediate relatives or from any employee or agent of the business, or to solicit or demand that such employees or agents seek such reviews from their relatives, when:
(i) the solicitation or demand results in an officer’s or manager’s immediate relatives, an employee or agent, or the immediate relatives of an employee or agent writing or creating such a review without a disclosure of the reviewer’s material relationship to the business, and
(ii) the officer or manager:
(a) encouraged the prospective reviewer not to make such a disclosure,
(b) did not instruct that prospective reviewers disclose clearly and conspicuously their relationship to the business, or
(c) knew or should have known that such a review appeared without such a disclosure and failed to take remedial steps.
(2) However, paragraph (c)(1) of this section does not apply to generalized solicitations to purchasers for them to post reviews about their experiences with the product, service, or business.
§ 465.6 Company-Controlled Review Websites or Entities.
It is an unfair or deceptive act or practice and a violation of this part for a business to materially misrepresent, expressly or by implication, that a website, organization, or entity that it controls, owns, or operates provides independent reviews or opinions, other than consumer reviews, about a category of businesses, products, or services including the business or one or more of the products or services it sells.
§ 465.7 Review Suppression.
It is an unfair or deceptive act or practice and a violation of this part:
(a) for anyone to use an unfounded or groundless legal threat, a physical threat, intimidation, or a public false accusation in response to a consumer review that is made with the knowledge that the accusation was false or made with reckless disregard as to its truth or falsity, in an attempt to:
(1) prevent a review or any portion thereof from being written or created, or
(2) cause a review or any portion thereof to be removed, whether or not that review or a portion thereof is replaced with other content, or
(b) for a business to materially misrepresent, expressly or by implication, that the consumer reviews of one or more of the products or services it sells displayed in a portion of its website or platform dedicated in whole or in part to receiving and displaying consumer reviews represent most or all the reviews submitted to the website or platform when reviews are being suppressed (i.e., not displayable) based upon their ratings or their negative sentiment. For purposes of this paragraph, a review is not considered suppressed based upon rating or negative sentiment if the suppression occurs based on criteria for withholding reviews that are applied equally to all reviews submitted without regard to sentiment, such as when:
(1) the review contains:
(i) trade secrets or privileged or confidential commercial or financial information,
(ii) defamatory, harassing, abusive, obscene, vulgar, or sexually explicit content,
(iii) the personal information or likeness of another individual,
(iv) content that is discriminatory with respect to race, gender, sexuality, ethnicity, or another intrinsic characteristic, or
(v) content that is clearly false or misleading;
(2) the seller reasonably believes the review is fake; or
(3) the review is wholly unrelated to the products or services offered by or available at the website or platform.
§ 465.8 Misuse of Fake Indicators of Social Media Influence.
It is an unfair or deceptive act or practice and a violation of this part for anyone to:
(a) sell or distribute fake indicators of social media influence that they knew or should have known to be fake and that can be used by individuals or businesses to materially misrepresent their influence or importance for a commercial purpose; or
(b) purchase or procure fake indicators of social media influence that they knew or should have known to be fake and that materially misrepresent their influence or importance for a commercial purpose.
§ 465.9 Severability.
The provisions of this part are separate and severable from one another. If any provision is stayed or determined to be invalid, the remaining provisions will continue in effect.
Date: August 14, 2024
For more information, see here: https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-465-trade-regulation-rule-use-consumer-reviews-testimonials-final-rule
AND
https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D
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