In a significant move to bolster consumer protection, the Federal Trade Commission (FTC) has put forth for public comment a new proposed rule on consumer reviews and testimonials. The FTC’s Proposed Rule, codified under 16 C.F.R. part 465, puts forward a prohibition on several identified practices related to consumer reviews and testimonials. This proposal follows the basic definitions proposed in the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides).
A glimpse of the original post by Reed Smith shows that the agency’s focus is twofold: to prevent deceptive endorsements and to ensure honest reviews. The emphasis is given to creating a powerful legal deterrent against unlawful practices such as posting fake reviews, selectively presenting only positive reviews, or giving incentives to users for leaving positive reviews.
Section 465.1, specifically, introduces various definitions, which are mostly based on the definitions proposed in the FTC’s Endorsement Guides. The details of these definitions help in narrowly tailoring the regulated behavior associated with consumer reviews and testimonials, thereby increasing the rule’s effectiveness.
The progression from the Endorsement Guides to this Proposed Rule represents a continued focus by the FTC to establish concrete regulations in the area of customer reviews, a remarkable effort considering the vast uncertainty of the digital marketplace. This new rule carries meaning not only for businesses but also for law firms and legal professionals guiding corporations through FTC regulations and compliance.
It is important for all those impacted to pay close attention to these proposed changes and prepare their comments for the FTC. As the commission seeks public opinion, this is an opportunity for legal professionals to weigh in on these pressing issues and help shape the future landscape of consumer protection law.