The Federal Trade Commission is finalizing proposed rules that could put teeth in the effort to battle fake online reviews.
Perhaps in anticipation of those rules, the digital platforms that host user-generated reviews—from Yelp to Tripadvisor—are also taking steps that they say are designed to eliminate the bad actors who post false or deceptive content.
Both efforts, however, could put restaurants in the crosshairs.
The FTC’s proposed rule, for example, would trigger civil penalties in an effort to stop marketers from selling or buying fake reviews, or suppressing honest negative reviews.
“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement earlier this year. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”
The rule, which was published in the Federal Register in July, was open for public comment through the end of September. It’s not clear when the rule will be final.
Technically, the FTC already has the ability to crack down on deceptive advertising. But having the ability to impose financial penalties as restitution is what federal officials believe will give them the tools needed to crack down on what some call a black market for fake reviews.
A two-edged sword
“For the restaurant industry, [online reviews] are certainly a huge portion of what draws people to their businesses,” said Kay Dean, a former federal investigator and founder of the consumer-protection advocacy group Fake Review Watch. “Businesses live and die by these reviews.”
But, she added, “The amount of review fraud being orchestrated and facilitated on these social media platforms is utterly shocking.”
Unfortunately, when it comes to fake content posted on review sites, restaurants can be both victim and perpetrator.
It has become all too common for restaurants to be targeted by malicious fake reviews for political reasons, for example, or by a competitor. Often such postings can be easy to spot but they can be difficult to have removed and can influence a restaurant’s rating on Yelp, for example.
Last year, restaurants across the country were hit by scammers who posted one-star reviews and demanded Google Play gift cards as a sort of ransom to have them taken down.
“Fake restaurant reviews are a disheartening phenomenon,” wrote Andrew Gruel, chef-owner of Calico Fish House in Huntington Beach, Calif., and founder of American Gravy Restaurant Group, in an email. “They are being used against business for various reasons, from both social and political and everything in between. They not only mislead potential customers but also undermine the trust we place in online platforms for reliable information.”
But restaurant companies are also known to play the game, at times paying companies that churn out fake positive reviews or incentivizing employees or others to post false testimonials on a competitor’s profile.
Dean said she has documented thousands of restaurant reviews that are openly plagiarized from one online site to another, for example, or that she knows have been written by the restaurant itself or its employees.
“Cheating is rewarded,” she said. “The current system, as it is, rewards cheating and harms honest businesses, and erodes good business ethics.”
The proposed crackdown
As proposed, the FTC rule would prohibit the selling or obtaining of fake consumer reviews or testimonials. That means businesses could not write or sell reviews from someone who either doesn’t exist or who never visited the business or experienced the service in question, a practice of what some call “fake review farms.”
It would also prohibit businesses from procuring or disseminating reviews or testimonials that they know, or should know, are false.
In addition, businesses would be prohibited from providing compensation or other incentives conditioned on the writing of a review, whether positive or negative.
For a restaurant, for example, that could mean offering a social media influencer a free meal, for example, in exchange for a review.
Tim Butler, a former prosecuting attorney for the FTC who is now with law firm Greenberg Traurig in Atlanta, said a key factor for any business will be transparency.
“The FTC is trying to create a level playing field,” he said. “If there’s been any free gift given, their perspective is consumers need to know that the comment made by the influencer was given at least in part because of that compensation.”
Butler recommended that restaurants work with their local counsel to craft a policy on user-generated reviews, one that endorses transparency.
“In the ad law context, businesses can accomplish a great deal by asking the simple question: Are we being transparent, honest or careful about what they’re saying?”
The proposed FTC rule, meanwhile, has largely been endorsed by online platforms like Yelp and Tripadvisor that rely on user-generated content.
This week, six online review sites announced their own effort to combat such fake reviews. A newly created Coalition for Trusted Reviews is a cross-industry collaboration that includes Amazon, Booking.com, Expedia Group, Glassdoor, Tripadvisor and Trustpilot.
The goal is to create best practices for hosting online reviews and sharing methods for detecting those that are fake with the idea they can be stopped at the source.
Tripadvisor, for example, in 2022 removed 1.3 million reviews from its platform as a whole for fraud. Of those, about 43% of the reviews were for restaurants.
Yelp, meanwhile, is not part of the coalition but has also been promoting efforts to police its own platform to build consumer trust.
The platform, for example, uses alerts on profile pages to help consumers spot deceptive practices. Yelp will place a Compensated Activity Alert on a company’s page when they receive evidence that a business has paid for a review, for example.
An screenshot of one example of "evidence" of the offer of compensation for a review by Yelp.
The platform also uses Suspicious Review Activity Alerts when Yelp detects a large number of reviews coming from a single IP address, or reviews from users who may be connected to a group that coordinates incentivized fake reviews, the company said.
And, in what some have dubbed a “wall of shame,” Yelp also keeps an index of businesses that have attempted to manipulate reviews for consumers to peruse, though it is not searchable.
Yelp said more than 206,700 reviews were removed by their moderation team in 2022.
Dean, however, sees efforts by the online platforms and by the FTC as falling way short of what is needed.
The FTC rule is a step in the right direction, but it does nothing to hold the online platforms responsible for hosting false content, she contends.
“They’re basically being given a free pass,” she said. “Unfortunately, in my opinion they’re a large part to blame for the immensity of the problem.”