In an era of escalating scrutiny over online content, one regulatory body is making it crystal clear: fake reviews are over. If you syndicate, collect, moderate or display reviews, this guidance applies to you.  

The FTC issued this final rule in August of 2024, after concluding that deceptive practices related to consumer reviews and testimonials were widespread and damaging—both to consumers and to fair market competition. While these behaviors were already illegal under Section 5 of the FTC Act, the Commission determined that formalizing the rule was necessary to strengthen deterrence and improve its ability to enforce compliance through civil penalties and consumer restitution.

What the FTC Proposed

In July 2023, the FTC released a draft rule aimed at curbing deceptive review and endorsement practices. It proposed formal bans and definitions across several areas, informed by earlier public input and enforcement history. The key proposals included:  

1. Ban on Fake Reviews and Testimonials

The use of deceptive review practices, including reviews written by fictitious individuals, endorsements from people who never used the product, and testimonials that distort or exaggerate real customer experiences are strictly forbidden. 

2. Ban on Paid or Incentivized Reviews Based on Sentiment 

The rule outlawed providing anything of value (e.g., money, discounts, free products, etc.) in exchange for predetermined positive or negative reviews, even if the reviewer disclosed the incentive.  

3. Disclosure Requirements for Insider Testimonials 

Reviews or endorsements from employees, agents or immediate family members of a business must include a clear and conspicuous disclosure of the relationship, so that consumers are not misled about the source or impartiality of the content. 

4. Ban on Company-Controlled “Independent” Review Sites  

A review platform that appears to be independent or operated by a third party but is in fact owned or influenced by the business whose products or services are being reviewed, is considered deceptive unless that relationship is fully and clearly disclosed to consumers. 

5. Prohibition on Review Suppression 

Banning the suppression or manipulation of consumer feedback through tactics like review gating—soliciting feedback only from likely satisfied customers—or selectively publishing only positive reviews. Brands also cannot use baseless legal threats to intimidate or remove legitimate negative content. 

6. Review Reuse/Repurposing (“Review Hijacking”) 

Banning the reuse of reviews written for one product or service to promote another—especially if the two products differ materially. This proposed rule was eventually dropped. 

Yes, AI-Generated Reviews Are Covered

The FTC’s final rule makes clear that AI-generated reviews are subject to the same restrictions as any other form of deceptive content. The Commission explicitly called out the growing risk of synthetic reviews created by large language models and automation tools, noting that these technologies make it easier to flood the internet with fake but realistic-looking feedback.  

Under the rule, it doesn’t matter whether a review was written by a human or a machine—if it misrepresents a consumer experience or identity, it’s prohibited. Retailers that knowingly—or even negligently—publish or syndicate AI-generated reviews could face penalties, especially if they fail to authenticate sources or filter out synthetic activity. 

If you can’t prove a review came from a real customer, it shouldn’t be published. 

Repurpose Reviews with Caution

For the purposes of this summary, we will focus on consumer reviews—as these are the primary form, and most trusted form, of user-generated content that retailers and marketplaces manage and leverage directly. While most of the proposed provisions made it into the final 2024 rule, a few were either modified for clarity or removed altogether after internal review and public hearings. 

The most notable deletion was the proposal to ban review repurposing—often called “review hijacking.” This would have prohibited businesses from reusing or reattributing reviews written for one product to promote another, materially different one. The FTC ultimately withdrew this provision, citing concerns about clarity, overlap with existing enforcement authority, and the need for more case-specific nuance. That said, the practice may still be actionable under general deception principles. 

Are Incentivized Reviews Still Allowed? 

Incentivized reviews are not banned outright, but the FTC’s final rule places them under strict conditions that leave little room for error. 

The rule prohibits buying or selling consumer reviews based on sentiment. This means it is illegal to offer value (money, products, discounts, rewards) in exchange for a predetermined positive or negative review—regardless of whether the reviewer is honest or discloses the incentive. 

However, the FTC does allow neutral incentives—offers made without regard to sentiment—as long as the reviews are clearly and conspicuously disclosed as incentivized. 
 
For example: 

Permitted: “Leave a review and get 10% off your next purchase.”  

Prohibited: “Leave a 5-star review and get a gift card.”

Retailers that run post-purchase campaigns or use apps that reward review submission must: 

• Apply the incentive regardless of rating or tone.

• Ensure that all incentivized reviews are visibly labeled as such.

• Avoid suppressing or deprioritizing negative feedback, even when incentivized.

The FTC made clear that the risk isn’t just the incentive—it’s the misleading impression created when readers aren’t aware of it. Transparency is what separates a compliant incentive program from a deceptive one.

Prudence is the Smart Play

The FTC’s intent with this rule is unambiguous: deceptive review practices are no longer just discouraged—they are now explicitly prohibited, enforceable, and penalizable. By formalizing these rules under 16 CFR Part 465, the Commission is signaling that review integrity is a regulatory priority, not just a reputational issue. And while certain edge cases remain open to interpretation—such as what qualifies as "control" over a platform or how disclosures must appear in evolving formats—the direction of enforcement is clear. Retailers who wait for case law to define every boundary are effectively gambling with brand equity and legal risk.

A more prudent response is to treat this rule as a floor, not a ceiling.

That means:

• Eliminating any grey-zone practices around gating, sentiment-conditioned incentives, or selective moderation.

• Insisting on transparency and traceability in all syndicated review content.

• Disclosing relationships and incentives clearly and consistently—not just in metadata, but in the shopper-facing experience.

• Reducing reliance on incentivized and product sampling programs.

• Auditing platforms and partners to ensure systems support compliance, are hedged with multiple review syndication sources and allow for transparency.

In short: the safest and most strategic move for retailers is to adopt a compliance-first architecture when it comes to user-generated content. The FTC has drawn a line, and since the momentum is clearly moving towards more regulation, retailers should not be standing anywhere near it.