The Federal Trade Commission (FTC) is considering changing its powers to allow it to crack down on “fake positive reviews or manipulation of reviews by suppressing bad ones.”
In a new statement from the US government agency, Samuel Levin, director of the FTC’s Consumer Protection Bureau, said:
We’re updating our guidelines to combat fake reviews and other forms of misleading marketing, and we’re alerting marketers to child-targeted ads. Whether it’s fake reviews or influencers hiding that they’ve been paid to post, this kind of deception leads people to pay more money for bad products and services and hurts fair competition.
The new guidelines will also warn social media platforms that host reviews, such as YouTube, that their tools are not robust enough to ensure paid content is properly disclosed and could lead to potential liability. This will also affect virtual youtubers (animated characters that are controlled live by the creator).
Controversial YouTuber PewDiePie (real name Felix Kjellberg) was criticized in 2014 for not properly disclosing that he received money from Warner Brothers for posting positive impressions of Middle: Earth Shadow of Mordor.
This led the FTC to reach an agreement with Warner Bros that prohibited them from disclosing similar paid content. This was an early case that set the standard for influencer marketing in the US.
The laws in the UK are much stricter, with heavy fines being imposed on influencers who post undisclosed content that they were paid for.
Unlike most territories, simply placing a hashtag in the description stating that the video is an ad is not enough, creators must verbally communicate that the content is paid for by a third party at the beginning of the video.