The U.S. Federal Trade Commission has announced a new rule to punish businesses for buying or selling fake reviews and endorsements, with implications for the travel industry. Fake reviews have been a long-running problem in the travel sector, with hoteliers often posting fake reviews to boost their online ratings or make competitors look bad. The new rule allows the FTC to seek civil penalties of up to $51,744 per violation, with enforcement beginning within two months. The rule will impact online review sites, travel agencies, hotel and rental providers, influencers, and other review generators.
The new rule prohibits the creation, purchase, or sale of fake reviews, including those generated by AI or individuals without genuine experience. Travel agencies, booking platforms, blogs, and other travel services may face legal consequences if they do not take reasonable steps to police fake reviews. Policing reviews on digital platforms can be challenging, as rogue marketers constantly find new ways to manipulate the system. Determining genuine from manufactured sentiment is often difficult, leading to potential legal risks for those who fail to comply with the rule.
In addition to travel services, social media influencers, bloggers, and others who receive compensation for endorsements may also be at legal risk if they do not follow ethical practices. The FTC has banned the practice of providing compensation or incentives in exchange for positive reviews or endorsements on social media. FTC Chair Lina Khan stated that fake reviews not only deceive consumers but also harm honest competitors and pollute the marketplace. The rule aims to protect consumers from misleading information and ensure fair competition in the industry.
The problem of fake reviews is not a new issue, with platforms like Tripadvisor and Google working to combat the spread of fraudulent content. Tripadvisor removed 1.3 million reviews in 2022, most before they were even posted, while Google removed about 200 million pieces of fake content from its Maps app the same year. Tripadvisor’s approach to content integrity aligns with the new FTC rule to ban fake reviews, demonstrating the importance of maintaining trust and transparency in the online review ecosystem. The travel industry must continue to monitor and address fake reviews to protect consumers and uphold the integrity of the marketplace.
Overall, the new rule by the FTC aims to crack down on fake reviews and endorsements in the travel industry and beyond. With civil penalties of up to $51,744 per violation, businesses and individuals face legal consequences for engaging in deceptive practices. Policing fake reviews on digital platforms presents a challenge for businesses, as distinguishing between genuine and fake sentiment is oftentimes complex. By targeting bad actors while allowing platforms that make good faith efforts to vet content to continue their operations, the rule seeks to protect consumers and promote fair competition in the marketplace. Tripadvisor and Google’s efforts to combat fake reviews highlight the ongoing battle against misleading and fraudulent content online.
