UNITED STATES OF AMERICA

Federal Trade Commission

WASHINGTON, D.C. 20580

Office of the Chair

Statement of Chair Lina M. Khan

Regarding the Advanced Notice of Proposed Rulemaking

on Unfair or Deceptive Reviews and Endorsements

Commission File No. P214504

October 20, 2022

Online shopping runs on reviews. When you’re in a brick-and-mortar store, you can see 

the inventory. If it’s a couch, you can sit on it. If it’s a TV, you can watch it. But when you’re 

shopping online, it’s much harder to know what you’re actually buying. That’s why reviews are 

so crucial. If 500 other people have bought something and say it works, you can have a lot more 

confidence.

But what if those people were paid to leave those positive reviews? Or what if they’re 

bots? What if the seller is hiding a thousand one-star reviews?

That’s the dilemma when you shop online. Reviews are essential, but it’s hard to know 

when they can be trusted. Precisely because of the importance of reviews, firms can face 

powerful incentives to game the system. Businesses have been caught leaving positive reviews

for their own products or services, suppressing negative ones, and boosting bad reviews of their 

competitors.0F

1 The incentives extend beyond the seller of the product itself. The platforms that 

host reviews may also, in some instances, benefit indirectly from fake ratings and endorsements 

and have financial incentives to turn a blind eye to misconduct that brings in revenue.

These practices don’t only harm the consumers who place their trust in fake reviews. 

They also pollute the marketplace and put honest businesses at a competitive disadvantage.

The Commission has brought several enforcement actions to address this issue. In 

January, for example, the Commission settled allegations that the fast-fashion company Fashion 

Nova had suppressed negative reviews.1F

2 And in August, the Commission, along with several 

state attorneys general, sued Roomster for allegedly flooding its rental listing marketplace with 

phony reviews.2F

3

1 See, e.g., Sherry He, et al., The Market for Fake Reviews, 41 MKTG. SCI. 896 (2020) (measuring the impact of fake 

reviews on Amazon sales); Theodore Lappas, et al., The Impact of Fake Reviews on Online Visibility: A 

Vulnerability Assessment of the Hotel Industry, 27 INFO. SYS. RSCH. 940 (2016); Renee DiResta, Manipulating 

Consumption, MEDIUM (Jun. 29, 2018), https://medium.com/@noupside/manipulating-consumption-42f2e9013d0b. 2 Press Release, Fed. Trade Comm’n, Fashion Nova will Pay $4.2 Million as part of Settlement of FTC Allegations 

it Blocked Negative Reviews of Products (Jan. 25, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/01/fashion-nova-will-pay-42-million-part-settlement-ftc-allegations-it-blocked-negative-reviews. 3 Press Release, Fed. Trade Comm’n, FTC, States Sue Rental Listing Platform Roomster and Its Owners for Duping 

Prospective Renters with Fake Reviews and Phony Listings (Aug. 30, 2022), https://www.ftc.gov/news-
2

In addition to enforcement activity, the Commission has used other authorities to try to 

address market-wide problems with fake reviews. Last year, the Commission put more than 700 

companies on notice regarding its litigated decisions in this area, which triggered the FTC’s 

penalty offense authority.3F

4 This past May, the Commission also proposed revisions to tighten its 

guidelines for advertisers who use endorsements and reviews and to warn social media platforms 

about inadequate disclosure.

With today’s Advance Notice, the Commission is seeking comment from the public on 

whether rulemaking would be an appropriate way to address the problem more systemically. 

A rulemaking here would provide benefits beyond the agency’s other powers. The 

Supreme Court decision in AMG Capital Management, LLC v. FTC substantially limited our 

ability to seek monetary relief for harmed consumers.4F

5 A rule against fake reviews could enable 

us to obtain civil penalties and return money to consumers injured as a result of deceptive or 

unfair reviews and endorsements.

I am grateful to staff for their hard work on this ANPR. And I am happy to cast my vote 

in favor of beginning this process. It’s critical that the Commission use all of its authorities in 

order to prohibit unfair or deceptive practices—and to help consumers who have been harmed by 

them. I look forward to hearing from the public and stakeholders as the agency embarks on the 

rulemaking process.

***

events/news/press-releases/2022/08/ftc-states-sue-rental-listing-platform-roomster-its-owners-duping-prospectiverenters-fake-reviews. In addition, in 2019, the FTC sued a company called Synovia for marketing a fake arthritis 

cure with fake testimonials and fake doctor endorsements. Press Release, Fed. Trade Comm’n, FTC Stops Marketers 

from Making False Arthritis Treatment Claims (Dec. 5, 2019), https://www.ftc.gov/news-events/news/pressreleases/2019/12/ftc-stops-marketers-making-false-arthritis-treatment-claims. In January of this year, the 

Commission settled with Vision Path for, among other things, failing to disclose that one of its own senior 

employees posted a positive review on the BBB website. Press Release, Fed. Trade Comm’n, Vision Path, Inc., 

Online Seller of Hubble Lenses, Settles Charges it Violated the Contact Lens Rule and FTC Act to Boost Sales (Jan. 

28, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/01/vision-path-inc-online-seller-hubblelenses-settles-charges-it-violated-contact-lens-rule-ftc-act. 4 Fed. Trade Comm’n, Penalty Offenses Concerning Endorsements, https://www.ftc.gov/enforcement/penaltyoffenses/endorsements. 5 AMG Capital Mgmt. v. FTC, 141 S. Ct. 1341 (2021).