FTC warns companies about use of fake reviews
WASHINGTON – Federal regulators say they are cracking down on “an explosion” of businesses using fake reviews and other misleading messages to promote their products and services on social media.
The Federal Trade Commission said it has warned hundreds of major corporations and smaller businesses that they could face fines if they use bogus endorsements to deceive consumers.
“The rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace,” the FTC said in a news release Wednesday.
The FTC action signals a commitment to flex its authority to use penalties to enforce consumer protection laws. The agency said it has sent formal notices of penalty offenses to about 700 companies, warning they could face penalties of up to $43,792 for each violation.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, who heads the agency’s consumer protection bureau. “Advertisers will pay a price if they engage in these deceptive practices.”
The companies receiving the notices are a who’s who of Corporate America.
They include tech giants Amazon, Apple, Facebook, and Google and its Youtube video service, as well as internet service providers like AT&T and Comcast.
Others run from retailer Abercrombie & Fitch and brewer Anheuser-busch to manufacturers General Electric, General Motors and Honda. Popular shopping and review sites such as ebay and Yelp also are included.