If you own an ecommerce brand, you know first-hand that running an online company comes with its fair share of challenges. The latest changes from the Federal Trade Commission (FTC) are set to reshape how brands handle online reviews, adding another complex layer to ecommerce. Suppose your brand relies on broadcasting customer testimonials to build trust and drive sales. In that case, it’s important to understand how the new FTC regulations impact your business and how you can remain compliant.

The FTC’s New Rule

On August 14th, 2023, the FTC introduced a rule targeting the manipulation of online reviews and testimonials. This move is part of the FTC’s ongoing efforts to protect consumers from deceptive practices, especially in light of the 2021 Supreme Court decision in AMG Capital Management, LLC v. FTC, which limited the agency’s ability to seek monetary penalties from companies making unsubstantiated claims. This change is expected to enhance the FTC’s enforcement capabilities, allowing it to take quicker action against businesses engaging in dishonest practices.

The Six Violations and What They Mean for Your Brand

There are six violations within the new FTC regulations that every ecommerce brand should be aware of:

1. Fake or False Reviews 

This includes any attempt to create or distribute reviews that mislead consumers, whether they’re generated by AI or other deceptive methods. Authenticity is key, so make sure all reviews are genuine reflections of your customers’ experiences.

2. Paid Reviews

Offering compensation in exchange for positive or negative reviews is now explicitly prohibited. Focus on encouraging organic reviews from satisfied customers rather than buying your way to a better reputation, including hiring influencers to falsely promote your products.

3. Insider Reviews

Reviews from employees or anyone with invested interest in your brand must be clearly disclosed. Transparency here will help you avoid the risk of misleading your customers.

4. Company-Controlled Review Sites

If your brand operates a review page, it must present reviews as unbiased and independent comments. Any attempts to control or manipulate the narrative can now result in enforcement actions taken on your business.

5. Suppressing Negative Comments

Trying to hide or remove negative feedback can backfire. Instead, use criticism as an opportunity to improve and show your customers that you are committed to delivering a better product or service. Platforms like Google Business allow you to respond to negative comments with your side of the story, just make sure you take accountability and are respectful.

6. Misusing Social Media Indicators

Inflating likes, followers, or other social media metrics to create a false impression of popularity is another area the FTC is cracking down on. Previously, buying followers was simply unethical behavior, but now it is also a possibility for legal action. Authentic engagement should be your ultimate goal.

How to Remain Compliant and Build Trust

Remaining compliant with these new regulations doesn’t mean you have to give up on leveraging reviews as a powerful marketing tool. Instead, allow it to be an opportunity to double down on authenticity and build even stronger connections with your customers. Encourage real, honest feedback and focus on delivering an experience that naturally generates positive reviews.

Remember, your brand’s reputation is built on trust, and in the current ecommerce atmosphere, trust is more valuable than ever. By aligning your practices with these new regulations, you’re not just avoiding penalties, you’re setting your brand up for long-term success!