The US Federal Trade Commission warned 10 companies during the holiday shopping season that they could face lawsuits and hefty fines if they “try to game the review system” with fake testimonials – signaling stepped-up enforcement of its updated Endorsement Guides could be imminent in 2026.
While the FTC did not disclose the recipients of the letters, the message in them was clear – and applies to all companies, including packaged food and beverage manufacturers: The agency will not tolerate the deliberate use of “fake or false reviews” that mislead consumers or which distort the marketplace to the detriment of “honest competitors” who follow the law.
FTC stresses in the letters and related materials that violations left unchecked could lead to civil penalties of up to $53,088 per violation – which it notes “can quickly add up.”
The letters also signal an end to any grace period the FTC may have granted companies following the Oct. 21, 2024 effective date of the Endorsement Guides (aka the Rule on the Use of Consumer Reviews and Testimonials), which was updated in part to incorporate industry concerns about the authenticity of reviews on social media or the potential use of bots or AI to quickly generate false reviews that could significantly shift sales and ultimately dilute consumer trust.
“As consumers increasingly depend on online reviews, the FTC is committed to ensuring companies comply with this Rule,” the agency said – further suggesting a crackdown could be looming.
Caught in the crosshairs: Practices the FTC says violate the rule
In the letters, FTC urges “immediate review” of the rule, including updates that prohibit:
- Reviews or testimonials that misrepresent the user’s experience or the extent the reviewer used the product or service.
- The purchase of positive – or negative – reviews, or conditioning compensation or incentives based on the content of reviews.
- The use of “insider reviews,” such as staff or their immediate family or relations without disclaiming the connection.
- The misrepresentation of a review website controlled by the company as independent.
- Threats to prevent or remove negative reviews or excluding negative reviews from a review portion of a product’s or company’s website;
- The purchase or sale of “fake indicators of social media influence, such as followers or views generated by a bot or hijacked account.”
While the agency notes that the letters do not reflect a “formal determination” of violations, it adds its staff reviewed information, including consumer complaints, and “has reason to believe” that the company “is violating or has violated the Consumer Review Rule.
As such, it advises recipients to “immediately cease and desist any conduct that does not comply with the Consumer Review Rule, and if necessary, take remedial action.”
FTC gave the companies five days of receiving the letter to describe how they planned to ensure compliance with the Consumer Review Rule.
Lessons from earlier enforcement actions
The salvo of letters to companies opens a new front in FTC’s enforcement of deceptive online advertising, which previously focused on how social media and video streaming platforms detect and restrict deceptive advertising, including how they help consumers identify commercial content, including paid endorsements.
A case brought by FTC against The Bountiful Company in 2023 for allegedly stealing or repurposing reviews of another product could also reveal related compliance risks and serve as a template for next steps, if and when the agency moves beyond warning letters.
