The Federal Trade Commission (FTC) is taking a firm stand against dishonest business practices in the creator economy and is banning viewbotting, AI-generated testimonials and phony reviews. The goal of this action, which will go into effect on October 13, 2024, is to protect customers and promote market fairness.
Cracking down on deceptive practices
The new FTC ruling primarily targets companies and individuals that use fake reviews and testimonials in their deceptive advertising. This includes people who purchase favorable reviews or fabricate testimonials using generative AI.
Additionally, fake social media indicators or automated programs used to artificially inflate viewer counts on livestreams, have been outlawed by the FTC. This includes viewbotting.
Viewbotting has been a recurring problem on websites like Twitch, where streamers occasionally purchase fake views to increase their viewership, particularly for sponsored streams.
This practice gives those who engage in it an unfair advantage by misleading sponsors and viewers. Even though viewbotting is already prohibited under Twitch’s terms of service, the website has had difficulty stopping it. The FTC’s recent decision strengthens the deterrent by enabling the organization to punish those who disobey the law.
Protecting honest competitors
FTC Chair Lina M. Khan emphasized the importance of this ruling in a statement, saying, “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors.”
She went on to say that the new regulation will help to maintain fair and competitive marketplaces and will enhance the FTC’s ability to combat deceptive advertising.
The ruling also targets various types of manipulation, including websites operated by the company that host reviews, insider reviews and review censorship. The FTC hopes to stop companies from taking advantage of the system and misleading customers by outlawing these tactics.