The FTC’s new ruling on fake online reviews, buying social media followers

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In a significant move that will undoubtedly shake up universal digital marketing and social media practices, the Federal Trade Commission (FTC) has announced a final rule banning fake followers, reviews, and testimonials. This new regulation, outlined in 16 CFR Part 465, directly targets unfair and deceptive practices involving consumer reviews and testimonials. For marketing who pride themselves on ethical marketing practices, this is a welcome development that will promote fairness and transparency in the digital marketplace. For business owners and marketing professionals, staying informed about this development is essential.

Why is this important?

The FTC’s final rule is a response to the growing problem of deceptive practices in online reviews, testimonials, and social media metrics. As FTC Chair Lina M. Khan stated: “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors.” This new regulation underscores the importance of maintaining trust and authenticity in your digital marketing efforts.

For businesses, this means the days of manipulating consumer perception through fake reviews and inflated social media followers are over. The rule is designed to protect consumers from being cheated and to ensure a level playing field for all businesses. This also highlights the growing importance of genuine engagement and transparency in social media practices.

What are the new rules?

The new FTC rule outlines several key prohibitions that businesses must adhere to:

1. Fake or false consumer reviews and testimonials: The rule bans the creation, sale, or dissemination of reviews and testimonials that are fake or false, including those generated by AI.
2. Buying positive or negative reviews: Offering compensation or incentives in exchange for reviews with a particular sentiment (positive or negative) is now prohibited.
3. Insider reviews: Reviews or testimonials from company insiders, such as employees or managers, must clearly disclose their relationship with the company.
4. Company-controlled review websites: Businesses can no longer misrepresent a website they control as an independent review site.
5. Review suppression: The rule prohibits businesses from suppressing negative reviews through threats, intimidation or false claims.
6. Fake social media indicators: The purchase or sale of fake social media indicators, such as followers or likes, is banned, especially when it misrepresents a business’ influence.

Now what?

Authenticity in digital marketing is key. Never purchase followers, testimonials, or engage in deceptive practices. Not only do these tactics fail to build a genuine community, but they also won’t convert into meaningful sales. Plus, it’s simply not a good look for your brand. Instead, focus on building genuine connections between your brand and your audience.

Moving forward, the key is to continue nurturing an authentic social media presence:

1. Emphasize real engagement: Encourage real customers to share their honest experiences. Genuine feedback from any satisfied clients will naturally enhance your brand’s credibility.
2. Transparency and honesty: Always ensure that any reviews or testimonials from employees, managers, or insiders are clearly disclosed. This honesty reinforces the trustworthiness of your brand.
3. Focus on organic growth: Avoid any shortcuts such as buying followers or likes. Instead, invest in creating engaging, relevant content that resonates with your target audience and drives natural growth.
4. Active review management: Stay proactive in managing and responding to reviews across platforms, maintaining a consistent and transparent approach.

What does this mean for the future?

Until now, social media has been the “Wild West” of marketing—a space where businesses could operate with minimal oversight.

In 2024, social media is no longer just a platform for sharing funny videos or vacation photos, as it has become an incredibly powerful sales funnel for businesses. As the financial stakes have skyrocketed, the government is stepping in to ensure fair play and accountability. This ruling by the FTC signals that the era of unchecked digital marketing may be coming to an end. With this increased scrutiny, it’s likely that more rules and regulations could be introduced in the near future, particularly as new technologies, like AI, continue to evolve.

Businesses should prepare for a future where transparency, authenticity, and ethical practices are not just recommended but required by law. As regulators turn their eyes toward social media, companies that adapt early will be better positioned to thrive in this area.

Carly Hariton is the founder of Charlotte Lane Media, a Plainview-based digital marketing agency specializing in managing social media presence for businesses across various industries.