The Federal Trade Commission (FTC) told hundreds of companies this week that fake online reviews and other deceptive endorsements could lead to fines.
The agency sent a notice to more than 700 companies across various industries. In a blog post, it explained that "the rise of social media has blurred the line between authentic content and advertising" which has led to an "explosion in deceptive endorsements across the marketplace."
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Advertisers will pay a price if they engage in these deceptive practices.”
Big tech companies on the list included Alphabet, Amazon, Apple, Facebook, YouTube, and Microsoft. Other big names like AT&T, Chipotle, Dunkin Donuts, Walmart, and Verizon were also included. But overall, the list is expansive and includes companies in a variety of industries.
The FTC noted that just because a business was sent a letter, it does not indicate that it has done anything wrong.
The notice said the FTC would be using its penalty offense authority to remind advertisers that they could incur penalties of up to $43,792 per violation if they falsely claim an endorsement by a third party, misrepresent whether an endorser is a current, actual, or recent user; use an endorsement to make deceptive performance claims; misrepresent that the experience of an endorser represents a customer's typical experience; or don't disclose "an unexpected material connection with an endorser."
Companies use endorsements and testimonials in many forms to advertise and market their products and services, both in traditional and social media, as well as in the form of online reviews. As reflected by the Commission’s enforcement actions and other efforts, some companies use these advertising tools in a manner that deceives consumers," Serena Viswanathan, associate director of the FTC, wrote in the letter to the companies.
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