The US Federal Trade Commission (FTC) has implemented new regulations targeting fake and misleading online reviews, with one of the first test cases being a B2B service called Sitejabber. The FTC has charged the service’s owner, GGL Projects, Inc., for violating these new rules, which are designed to prevent deceptive review practices.
The issue with Sitejabber’s service was that it prompted customers to rate their online shopping experience after checkout, with a one-to-five-star scale and an optional comment box. However, these reviews — which were intended to reflect the shopping experience, not the product itself — were later presented as product reviews. This led to misleadingly inflated ratings for the products. FTC Commissioner Melissa Holyoak noted that this practice conflated real customer feedback with actual product evaluations, ultimately harming both businesses and consumers.
The penalties for violating these rules can be steep, with fines reaching $50,000 per infraction. However, the FTC has not immediately imposed heavy fines, considering the recent implementation of the rules. Instead, Sitejabber has been banned from offering these deceptive review-gathering tools moving forward. While this case could serve as a test for the FTC’s ability to regulate online reviews, challenges in court are possible, especially under a future administration that may seek to scale back federal oversight. Nevertheless, the unanimous vote to move forward with this case indicates strong bipartisan support for protecting consumers from fraudulent review practices.