The Federal Trade Commission has issued a final rule prohibiting fake consumer reviews and testimonials.  More specifically, the rule expressly prohibits:

• Purchasing positive reviews
• Misrepresenting company-controlled review websites as independent
• Making baseless threats to suppress reviews or misrepresenting posted reviews as all-encompassing when negative reviews have been suppressed
• Engaging in similar behavior that may deceive consumers as to the authenticity of reviews

There has been a focus on the rule’s likely impact on fake reviews that appear on e-commerce platforms. But brands should not overlook the rule’s impact on influencer marketing, because it also prohibits purchasing, procuring, selling or distributing “fake indicators of social media influence.” 

When the rule goes into effect later this year, the FTC could seek civil penalties from violators, meaning brands that have not implemented policies to ensure compliance could find themselves on the receiving end of hefty monetary penalties. 

What is a fake “indicator of social media influence”?

The rule defines it broadly to include “any metrics used by the public to make assessments of an individual’s or entity’s social media influence, such as followers, friends, connections, subscribers, views, plays, likes, reposts and comments” that does not represent real individuals, their opinions and experiences.

These include bots, accounts not associated with a real individual, accounts created without consent and stolen accounts.

The rule addresses an important area in marketing at a time when tools such as generative AI are poised to increase the incidence of “fake” social media engagement. However, it does not represent a change in the FTC’s approach to deceptive social media marketing practices.

For example, in 2019 the FTC reached a $2.5 million settlement with bot farm Devumi. The FTC alleged that Devumi used various websites to sell more than 58,000 fake Twitter followers, more than 4,000 fake YouTube subscribers and more than 32,000 fake YouTube views to actors, athletes, musicians, and others who wanted to inflate their follower counts and apparent “influence” on social media.

State attorneys general have also been active in investigating deceptive social media practices, including in Washington, where the state attorney general secured $5 million from a plastic surgery practice that allegedly procured tens of thousands of fake likes and followers. 

Brands are well-advised to consider the following three strategies to ensure their practices align with FTC requirements:

Review social media policies with marketing and social teams

A brand may be found liable if it “knew or should have known” that the relevant social media indicators were fake. Brands should sit down with their social teams and review how their social media accounts are garnering engagement.

Is the team purchasing followers or likes? Does it periodically conduct audits and notice suspect behavior like substantial follower increases at odd times that might be tied to a bot farm? Ensure that the team is not inflating its follower count by purchasing bot likes or follows, but don’t forget to go deeper.

The rule squarely prohibits the sale, purchase, or procurement of fake followers, subscribers and likes.  While “selling” and “purchasing” followers from a bot farm is clearly prohibited, the inclusion of a “procurement” prohibition merits a second look, since something can be procured without a purchase.

For example, if a brand runs a contest that requires entrants to “like” a post or follow the brand’s Instagram account, it should not knowingly encourage or accept bot activity to increase its follower count or likes. The FTC has also indicated that AI-generated social media activity is covered by this prohibition. So, if a brand sees evidence of AI-generated activity in response to a request for social media engagement, it may be required to take steps to address that fake activity.

Review your influencer marketing program guidelines

We’ve said it for years: Internal influencer marketing program policies are an industry best practice.  Take a look at them now and consider what your brand requires of your influencers. If your brand uses influence indicators that are susceptible to being faked, consider implementing guardrails around that. For example, if your brand works only with those who have more than one million followers on Instagram, consider whether it makes sense to conduct audits as part of your selection process to ensure that the followers are real, or whether your contract should prohibit purchased followers and/or indemnify against such behavior.

Create AI guidelines to ensure compliance

Generative AI has become increasingly popular, and brands may find it a useful tool in enhancing social media presence. However, the use of AI-generated social media tools may contribute to the risk of using fake indicators of social media influence. AI is often trained to learn algorithms that help enhance content engagement, so brands must understand exactly what their AI programs are doing. Consider implementing at least some form of human review of AI practices on social media and look to crafting an internal policy on exactly how to use AI in social endeavors.