Manatt Advertising, Marketing and Media Partner Jeffrey Edelstein wrote a Law360 article about the informal hearing for the Federal Trade Commission’s (FTC) proposed trade regulation rule, which would prohibit creating, obtaining or selling fake customer reviews.
At the hearing, the Interactive Advertising Bureau (IAB) argued against FTC’s conclusion that compliance costs for businesses would be minimal, offering evidence from surveys indicating costs could run up to thousands of dollars. The presiding officer found the evidence to be insufficient. IAB raised another critical issue that the proposed rule is too broad and could consequently lead to suppression of honest reviews for fear of receiving a violation, a concern which the presiding officer dismissed. “If it becomes final, the FTC would be able to seek civil penalties against marketers who violate the rule,” Edelstein wrote. “Additionally, the FTC will also be able to seek monetary redress for consumers and others injured by fake reviews and testimonials.”
Read the full article here.