Restaurants that try to deceive the public with bogus posts on guest review websites stand to be penalized by the Federal Trade Commission (FTC) under new regulations issued by the agency on Thursday.
The rules, which take effect in 60 days, prohibit restaurants and other businesses from paying ghost writers to write and post favorable evaluations of a visit; actively soliciting positive assessments; writing their own reviews and attributing them to other parties; goading employees, financial backers, friends or other insiders to praise the establishment without revealing the connection; and editing reviews on a corporate site to accentuate the positives and mute the negatives.
The do’s and don’ts make up the bulk of the 163-page policy guidance document that was issued by the FTC. The common aim is to prevent businesses from hoodwinking potential customers by manipulating supposedly objective assessments into glowing appraisals that are not reality-based.
The agency estimates that online guest testimonials and amateur reviews influence which restaurants or bars land about $245 billion annually in food and beverage sales.
The banned practices include inviting so-called “influencers”—social media users with large audiences whose behavior is swayed by the gurus’ posts—to try a restaurant or other business with the understanding that positive things about the experience will be posted.
New penalties will apparently not be set for violators of the updated regulations. Rather, the FTC said, the rules will enable the agency to extend its mandate for combatting deceptive advertising practices to citizen-reviewer sites. In addition, while it may have previously held the authority to crack down on some of the deceptive posting practices of corporations, the new rules will allow it to move more quickly. The agency also mentioned the possibility of bringing lawsuits against offenders.
The FTC has been refining the rules for roughly 14 months. The final regulations fit an initiative announced Monday by the White House to reduce the annoyances and attempts at manipulation that routinely ire consumers. In addition to cracking down on fake consumer assessments, the Time is Money campaign aims to make the cancellation of gym memberships or magazine subscriptions much easier, and to streamline the process for submitting health-insurance claims.
The FTC estimates that nearly 26 million small businesses will be affected by the rule changes, since roughly 74% of small enterprises are reviewed on platforms like Google.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.