Amazon, Tech Groups Oppose FTC Liability for Fake Online Reviews
The FTC risks violating the First Amendment and Section 230 with its proposed rule for combating deceptive online reviews, Amazon and tech associations told the agency in comments posted Monday (see 2306300029). Consumer groups recommended the agency increase liability for online platforms not doing enough to police fake and deceptive reviews.
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Imposing “harsh penalties” on “responsible” platforms will have a “chilling effect” on reviews and the value they provide to consumers and businesses, said Amazon. An overbroad rule would incentivize platforms to “err on the side of suppressing and censoring reviews, for fear of liability if those reviews turn out to be ‘fake’ or ‘false,’” the company said: This raises concerns about the First Amendment and Communications Decency Act Section 230.
Any new regulations should target individuals creating the fake reviews, not the host websites, said the Computer & Communications Industry Association: “This will avoid unintended consequences for online review platforms that help people make decisions about where to spend money on goods and services,” CCIA said.
The U.S. Chamber of Commerce shared Amazon’s speech concerns, but it argued that when companies make “an intentional decision to substantially support or to willfully ignore fake review or testimonial schemes, they should be held accountable for their part in that harm.” The Chamber recommended the FTC rely on an “actual knowledge” standard when imposing liability against a website. The Chamber is concerned about vague language in the FTC’s proposed knowledge standard, which would rely on wording such as “knows or should know” or “knows or could have known.”
The Electronic Privacy Information Center said the agency should be required to show violators “actively knew or exercised deficient oversight necessary to discover that its endorsers were violating the rules.” This is a more reasonable approach than imposing a strict liability standard, which would mean companies are responsible for their endorsers’ actions regardless of knowledge, said EPIC. The organization said the agency should hold sellers “chiefly liable” for fake endorsements.
Websites like Amazon struggle to keep pace with the problem, said Consumer Reports. The company seems to address the problem only when it’s flagged by users, and without the threat of liability companies are incentivized to run misleading reviews, said CR. The proposed rule will reduce the incentives for platforms to run fake reviews by stating clearly that these can be considered unfair or deceptive acts under the FTC Act, said CR. But the proposed rule fails to provide “explicit restrictions” for review platforms like Google, Yelp and TripAdvisor, it said. CR suggested the agency require review platforms to take “reasonable measures” to root out fraud and deception in reviews.
TripAdvisor’s comments largely endorsed the FTC’s proposed rule. The proposal provides the FTC with new fraud enforcement tools “without undermining review-platform hosting models,” said TripAdvisor. The company also spoke against other commenters’ suggestions that the agency should require consumers to show purchase receipts in order to post reviews. “All travelers should be able to share their genuine, first-hand reviews and experiences -- not just those travelers holding the receipt for purchase,” said TripAdvisor. Yelp agreed, saying it’s important to allow anyone who has interacted with a business to write a review. Suppressing such reviews would violate the First Amendment, said Yelp: Consumers who don’t buy products also have valid opinions about their experiences, the company said.