Skift Take
Regulators aim to curb digital chicanery. Their target: fake AI reviews, paid praise, and biased endorsements from influencers. But policing the sprawling review ecosystem may become a headache for many.
The U.S. Federal Trade Commission announced a rule Wednesday aiming to punish businesses for buying or selling fake reviews and endorsements â and there are plenty of implications for the travel industry.
It’s been a long-running problem in travel. Itâs been an open secret for more than a decade that many hoteliers post fake reviews, often by hiring third parties. The aim is either to make competitor properties look worse or improve their own online ratings. Fake reviews can be created and posted by businesses themselves or by hiring services for as little as a few dollars per review. AI tools promise to turbocharge the practice.
But this new rule enables the FTC to seek civil penalties of up to $51,744 per violation, and the agency will start enforcing the rule within roughly two months.
The rule is targeted at a wide range of services â think restaurants â but the ruling will affect online review sites and travel agencies, hotel and short-term rental lodging providers, social media influencers, and other review generators.
Fake Reviews Create Legal Risk
The agency’s new rule prohibits the creation, purchase, or sale of fake reviews, including those generated by AI or individuals without genuine experience.
Travel agencies, travel booking platforms, travel price-comparison services, and blogs that fail to take reasonable steps to police fake reviews and endorsements could be held accountable.
While most companies may embrace the goal of protecting consumers from sleight of hand, some will face a burden in trying to police reviews on their digital sites and apps. Rogue digital marketers constantly test new ways to game the system. And drawing the line between genuine and manufactured sentiment is tricky.
“It is unclear how far-reaching this responsibility (and resulting civil penalties for violation) will be â e.g., a fake review gets posted to a platform and then linked/posted at service providers website, etc.,” said Christopher Anderson, a professor at Cornellâs SC Johnson College of Business via email.
However, the Travel Tech Association, which represents online travel agencies and other intermediaries, said that the agency had written the law in a way that properly targeted bad actors. The penalties aren’t singling out the tech platforms that carry content and that make a good faith effort to vet their content, it said.
“Travel Tech welcomes the adoption of the Commissionâs proposed rules that appropriately target bad actors without significantly burdening honest businesses and provide benefits to consumers and honest competitors.”
Social Media Endorsements, Too
Social media influencers, bloggers, and other people who are paid for endorsements may also be at legal risk if they don’t follow ethical practices.
The FTC has banned the practice of providing compensation or other incentives conditioned on posting reviews or endorsements, including via social media videos, with a desired sentiment.
âFake reviews not only waste peopleâs time and money but also pollute the marketplace and divert business away from honest competitors,â said FTC chair Lina Khan in a statement.
Tough Problem to Fight
The problem is long-standing. Tripadvisor caught and removed 1.3 million reviews in 2022, mostly before the reviews were ever posted, it said. Google said it removed about 200 million pieces of fake content from its Maps app that year.
Tripadvisor said that it is “pleased to see that Tripadvisor’s approach to content integrity aligns with, and in some cases even goes beyond, the FTC’s new rule to ban fake reviews.”
