FTC Rules on Reviews, Endorsements and Product Claims for Online Businesses

By Paul S. Rafelson, Founder, Rafelson Law PLLC

Why do reviews draw regulatory attention?

Reviews work because shoppers treat them as independent. Bought, fabricated or filtered reviews mislead shoppers and shift sales away from businesses whose reviews are real. Both harms draw the FTC and Amazon. That is the idea behind Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices (15 U.S.C. § 45), and behind the FTC’s Consumer Reviews and Testimonials Rule (16 C.F.R. Part 465), which took effect on October 21, 2024. The rule addresses fake or false reviews, buying reviews, reviews by insiders, company-controlled review sites, review suppression and fake social media indicators. A knowing violation can lead to civil penalties. The rule is enforced by the agency, and it does not give private parties a right to sue under the rule itself.

Why are incentives treated with so much care?

The rule says a business may not provide compensation or incentives in exchange for, or conditioned expressly or by implication on, reviews expressing a particular sentiment (16 C.F.R. § 465.4). In its published questions and answers, the FTC has explained that the rule does not prohibit incentives for reviews as long as they are not conditioned on the sentiment of the review, but that failing to disclose an incentive could still violate the FTC Act under the Endorsement Guides (16 C.F.R. Part 255). The difference between a gift conditioned on a positive review and an offer made to all purchasers regardless of what they say can be subtle, and it can turn on wording, timing and what recipients are led to expect. Platform policies are often stricter than the rule, so a practice the rule does not reach still breaks a marketplace’s terms. Amazon’s Community Guidelines bar creating, editing or removing a review in exchange for payments, refunds, discounts, products, gift cards, warranties or services. Amazon Vine is the only Amazon-sanctioned incentive program.

Why does asking only happy customers raise a question?

A seller that solicits reviews only from customers it believes are satisfied may not be buying reviews in the rule’s sense, but the FTC has said such a practice could violate the FTC Act, because it can leave the displayed reviews unrepresentative. The related provision on review suppression bars unfounded legal threats, physical threats, intimidation and public false accusations made knowingly or with reckless disregard for the truth and used to remove or prevent reviews. It also addresses suppression based on rating or sentiment while implying that displayed reviews reflect all or most. The rule leaves room for neutral criteria, such as removing reviews that disclose confidential information, are abusive or false or concern unrelated products. Where a given practice falls between those lines depends on how it is designed and described.

Why does the seller’s role matter?

The rule treats different roles differently. A business that merely hosts reviews written by others is treated differently from one that writes, buys or controls them, and the rule has provisions for insiders and company-controlled sites. Ordinary consumers who post reviews are not the rule’s target. For an online business that operates its own storefront, sells through marketplaces and works with affiliates or influencers, more than one role can be present at the same time, and the analysis may differ for each channel.

Why do endorsements and influencer posts belong in this discussion?

The Endorsement Guides (16 C.F.R. Part 255) address when a connection between an endorser and a brand, such as payment, gifted products or other benefits, should be disclosed so that readers can weigh the endorsement fairly. The brand is responsible for what its endorsers say and for undisclosed connections, even where the endorser is not liable. Endorsers and agencies carry their own liability (16 C.F.R. § 255.1(d) to (f)). Your contract decides who pays for a mistake, not who is liable to the FTC. See our pages on brand deals and talent agreements and the influencer protection article for the contract side of this.

Why is “Made in USA” its own subject?

The FTC’s Made in USA Labeling Rule applies to product labels and to a seal, mark, tag or stamp labeling a product Made in USA in catalogs and online promotional material, such as a product page (16 C.F.R. §§ 323.1, 323.3). An unqualified claim passes only if final assembly or processing happens in the United States, all significant processing happens in the United States and all or virtually all ingredients or components are made and sourced in the United States (16 C.F.R. § 323.2). A violation of the rule carries civil penalties. Origin claims in other advertising follow the same standard under Section 5 of the FTC Act. Supply chains that mix domestic and imported parts, or that rely on a contract manufacturer, can make a seemingly simple claim hard to support. Qualified claims, such as “assembled in USA with imported parts,” raise their own questions. See packaging compliance for how claims interact with labeling.

Why do other claims matter too?

Health, safety, efficacy, environmental and “natural” claims can all raise substantiation questions under the FTC Act, and claims that suggest a medical or pesticidal purpose may also move a product into another regulator’s territory. See FDA registration and clearance and EPA pesticidal claims. Competitors and consumers may also bring claims under state law, and marketplaces may act on complaints without any regulator being involved.

Why involve a lawyer?

These questions tend to arrive in a hurry: a marketplace warning, a competitor’s letter, a regulator’s inquiry or a program a marketing team wants to launch next week. We test a review or incentive program against the rule, the Endorsement Guides and Amazon’s policy at the same time, because a program the FTC allows often breaks Amazon’s terms. The rule is less than two years old and FTC enforcement under it is still taking shape, so recent cases matter. Most business owners who call us have already launched the program. Calling before launch costs less.

How do I get started?

Contact us. Tell us how you collect reviews, what you offer customers and what the listing claims, and we will tell you whether we can help.

Frequently asked questions

Related pages

Sources and notes

• 16 C.F.R. Part 465 (Trade Regulation Rule on the Use of Consumer Reviews and Testimonials), effective October 21, 2024, including §§ 465.2, 465.4, 465.5, 465.6, 465.7 and 465.8, eCFR.
• FTC, Q&A on the Consumer Reviews and Testimonials Rule (November 2024).
• 16 C.F.R. Part 255 (Guides Concerning the Use of Endorsements and Testimonials in Advertising), including §§ 255.1 and 255.5.
• 16 C.F.R. §§ 323.1, 323.2 and 323.3 (Made in USA Labeling Rule, definitions, standard and scope). 15 U.S.C. § 45. Amazon Community Guidelines (promotions and commercial solicitations).