Courtesy J. Shapiro Law PLLC
By Jeffrey Shapiro
For many local businesses, Google reviews function as a public trust score that can influence whether a customer chooses one company over another. Because online reviews play such a significant role in consumer decision-making, regulators have increasingly focused on preventing review manipulation.
In response to widespread abuse, the Federal Trade Commission’s Rule on the Use of Consumer Reviews and Testimonials (16 CFR Part 465) took effect Oct. 21, 2024. The rule gives the FTC a new enforcement tool: the ability to seek civil penalties for knowing violations.
This column outlines the rule’s primary prohibitions and offers practical compliance steps for businesses.
What Does the Rule Cover?
The rule targets specific review-manipulation practices across platforms, including Google Business Profiles, Yelp, industry directories, retailer sites and social media. It focuses on fake or false reviews or testimonials, improper incentives, insider reviews without disclosure, review suppression, review hijacking (repurposing reviews) and fake indicators of influence such as followers, likes and views.
The rule prohibits creating, selling, buying or disseminating reviews or testimonials that are fake or false, including reviews from people who did not have the claimed experience. This can include fabricated Google reviews, AI-generated reviews presented as genuine consumer experiences or reviews from individuals who never used the product or service.
One important nuance of the rule is that it does not appear to ban incentives for reviews across the board. Instead, 16 CFR § 465.4 prohibits providing “compensation or other incentives” in exchange for, or conditioned (expressly or by implication) on, a review that expresses a particular sentiment (positive or negative). As a result, offering a discount only if a customer leaves a positive Google review is likely prohibited.
The rule text does not separately define “incentives,” but it uses the broad phrase “compensation or other incentives.” The FTC explains that § 465.4 targets incentivized reviews only when the incentive is tied to a required sentiment. Any attempt to implement a review incentive program should be reviewed by an attorney.
The rule also restricts certain insider reviews and testimonials that fail to clearly disclose material connections. This can arise when a business asks staff to “help our rating” or when friends and family are encouraged to post reviews without disclosing the relationship.
The rule also targets practices that suppress negative reviews, including conduct that misrepresents that displayed reviews reflect most or all reviews when negative reviews are being filtered out. It also addresses suppression through unjustified legal threats or similar tactics.
Repurposing reviews from one product or service to another can also be deceptive, particularly where the product or service is materially different. This most often arises with multilocation businesses, rebranded offerings or situations where reviews are migrated to a different service page in a way that changes what the review appears to reference.
The rule also targets the sale or purchase of fake indicators of social media influence, such as followers, likes and views, when used for commercial purposes. While this may sound limited to social media, it can also affect local businesses that promote themselves using influencer endorsements or engagement metrics.
What Are the Consequences of Noncompliance?
The FTC has emphasized that the rule allows the agency to seek civil penalties for knowing violations. FTC enforcement materials warn that penalties can be substantial and may accumulate quickly on a per-violation basis.
Practical Compliance Steps
To reduce risk, keep review practices simple: ask customers for honest feedback, not just positive reviews; avoid discounts or perks tied to a five-star rating; and establish a clear rule that employees, owners and family members should not post reviews (or must disclose the relationship if they do).
If you use a marketing vendor, confirm that the vendor is not buying, filtering or fabricating reviews. When a negative review appears, respond professionally and try to resolve the issue rather than silence it.
Jeffrey B. Shapiro is an attorney in the Capital Region who helps businesses navigate legal compliance and reduce regulatory risk. He provides practical, day-to-day guidance so business owners can stay focused on running and growing their companies.