The vast majority of America’s CEOs understand their obligation not to mislead investors and take it seriously. But how many can honestly claim a similar understanding of their obligations around consumer reviews? The Federal Trade Commission is now forcing the issue—and all executives need to pay attention.
For too long, consumer trust has been undermined by the prevalence of fake consumer reviews. This summer the FTC announced a new rule banning their use and empowering officials to seek consumer restitution and, for knowing violators, civil penalties of up to $50,000. Those rules have now gone into effect.
The FTC’s ruling provides a new level of regulatory support and enforcement that creates a better and fairer environment. Trustpilot has long been committed to identifying and removing fake reviews. Throughout the rulemaking process, we engaged with the FTC to share our insights and we were cited 27 times in the final ruling.
In 2023 alone, Trustpilot eliminated over 3.3 million fraudulent reviews and we continue to develop advanced AI technology to improve our capabilities. We have brought legal action against review sellers and those using fake reviews to mislead by suing them in court—a resource- and time-intensive investment that underscores our commitment to defending trust and integrity. If businesses use our platform in line with our guidelines, they will be compliant with the new FTC regulations.
What is important for executives to understand about the FTC’s new rule is that it represents more than new fines and penalties to stop them from using fake reviews. The rule has also created an opportunity to elevate the idea of trust in the consciousness of boardrooms.
Our research at Trustpilot has shown that 89% of global consumers check online reviews before making a purchase, and nearly half trust them as much as personal recommendations. With that level of influence, fake reviews don’t just mislead individual shoppers, they distort market dynamics, making it difficult for legitimate businesses to compete.
By eliminating fake consumer reviews and the distrust they create, executives now have a chance to instead understand consumer reviews as highly valuable data that offers authentic insights about their business. This shift creates new opportunities for deeper, more meaningful interactions between businesses and their customers online.
Consumers also benefit from authentic reviews. They seek out their peers’ opinions to provide them with earnest feedback and nuggets of wisdom about products and services.
Ultimately, the FTC’s decision isn’t just a one-off—it’s a signal to the market that trust is now a fundamental business requirement. For businesses that have operated with integrity, and for consumers, this is a win—it means genuine experiences can stand out.
If the FTC’s ruling becomes a catalyst for C-level executives to embrace an ethical and transparent approach to consumer reviews, the result would be a far healthier economy, where growth would be driven by honest competition and authentic consumer feedback.
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