Fake Reviews Are Fastest Growing Black Market in US, Says Federal Trade Commission
In the United States, fake reviews have become a flourishing black market, encompassing various industries such as healthcare professionals and contractors. There is ongoing controversy surrounding this issue, with accusations of double standards directed towards social media giants like Facebook, who have been criticized for their inadequate action in combating the problem. Furthermore, even the government agency responsible for enforcing laws against fake reviews, the Federal Trade Commission (FTC), has faced allegations of similar double standards. In a significant move, the FTC recently introduced new regulations aimed at curbing this rampant practice.
The Federal Trade Commission has taken a significant step towards addressing the issue of fake reviews. Last week, the agency launched an aggressive campaign to tackle this problem and put an end to the growth of fake reviews while also targeting the business of removing genuine negative reviews for a fee. These proposed regulations, as Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, stated, demonstrate the agency’s commitment to combat deceptive advertising in the digital age. The rule aims to impose civil penalties on violators, thereby creating a level playing field for honest companies.
The proposed policy changes released by the FTC have caused controversy due to a provision exempting giant review platforms, including Facebook, Yelp, Amazon, Instagram, and Google, from penalties for fake reviews. This exemption applies to businesses that distribute consumer reviews that are not related to their own products or services. The provision also excludes reviews published by platforms without any direct involvement in their purchase. Critics, like Kay Dean, the founder of Fake Review Watch, argue that this exemption grants undue leniency to these tech companies, likening it to letting drug cartels evade punishment while charging small-time dealers.
Facebook, also known as Meta, has been accused of turning a blind eye to the issue of fake reviews on its platform, despite its proclaimed commitment to fighting disinformation. Mrs. Dean, who has extensively investigated fake reviews, points out that numerous fake reviews can be found directly on Facebook. Despite these findings, Facebook has failed to respond to inquiries regarding this matter.
Fake Review Watch has provided substantial evidence indicating that Facebook is openly facilitating the trade, purchase, and sale of fake reviews while doing little to combat this issue. The organization presented a spreadsheet showcasing a group of reviewers posting multiple reviews for a variety of businesses, often on the same day. In some instances, the reviewers used the image of a real doctor under a different name on their Facebook profiles, further perpetuating the deception. Facebook’s lack of action in this regard is particularly alarming, considering the scale and impact of fake reviews as a form of disinformation affecting millions of consumers.
Facebook hosts an estimated 10,000 fake review groups worldwide, where individuals offer to post fake reviews on popular platforms such as Google, Yelp, Amazon, TripAdvisor, and Trust Pilot. These groups operate openly and charge as little as 50 cents per review. Some reviewers even provide samples of their prior work and demonstrate their ability to provide phone authentication using platforms like WhatsApp. Despite Mrs. Dean’s efforts to highlight these issues through her YouTube channel, Facebook has remained unresponsive.
Mrs. Dean’s organization also uncovered similar instances of fake reviews on Google, but the search engine giant failed to respond or take action to remove the fraudulent reviews. In one example, multiple patients of a neurosurgeon in Flint, Michigan, were shown to have identical shopping habits, raising suspicions about the authenticity of their reviews. Both Google and the neurosurgeon did not provide any response to inquiries made by The Epoch Times.
Fakespot, a software company specializing in fake-review detection, estimates that approximately 40 percent of all online reviews are fake. While writing fake reviews is already illegal, the FTC’s proposed regulations aim to tackle the issue through various measures. These include banning businesses from purchasing reviews, paying to remove negative reviews, and imposing heavy fines on those engaging in such fraudulent practices. The regulations also target review trading, fake celebrity endorsements, competitor-based fake reviews, fake customer testimonials, and incentivized reviews.
Despite the FTC’s proposed regulations being a step in the right direction, Mrs. Dean believes that federal legislation should be enacted to address the root of the problem. She emphasizes the need for accountability, especially for third-party platforms like Facebook, to effectively combat the widespread issue of fake online reviews. Mrs. Dean asserts that without holding these platforms responsible, the problem will persist.
Efforts have been made by various parties to combat fake reviews. Fashion Nova, for instance, agreed to pay $4.3 million in a settlement with the FTC after being caught blocking negative customer reviews. Additionally, third-party platforms such as Yelp, TripAdvisor, and Trustpilot have implemented measures to detect and remove fake reviews. Yelp utilizes software to flag suspicious reviews, and Trustpilot removed 2.7 million fake reviews out of the total 46.7 million posted on its platform in 2021. In contrast, Amazon claims to have removed over 200 million fake reviews in 2020 alone and has taken legal action against fake-review brokers.