In-House Lawyer's Guide to Consumer Reviews and Testimonials: Insights from the FTC and P&G

At the ANA Advertising Law Conference, an insightful panel titled “In-House Lawyer’s Guide to Consumer Reviews and Testimonials” brought together top legal and regulatory experts to dissect the implications of the FTC’s new Consumer Reviews and Testimonials Rule (16 CFR Part 465).

The panel featured:

• Serena Viswanathan, Associate Director, Division of Advertising Practices at the FTC
• Laura Kim, Partner at Covington & Burling LLP
• Matthew Fitzpatrick, General Counsel at Procter & Gamble

This dynamic discussion centered on how brands, in-house legal teams, and advertisers must adapt to this landmark rule to maintain compliance in an era of heightened regulatory scrutiny.

Setting the Stage: Why the New Rule Matters

Serena Viswanathan opened the panel by emphasizing the FTC’s unanimous bipartisan vote to approve the rule, marking a significant shift in how deceptive practices surrounding consumer reviews, influencer endorsements, and testimonials will be addressed.

“This rule provides clarity for businesses and gives the FTC the authority to impose penalties for fake reviews, undisclosed material connections, and other deceptive practices,” Viswanathan explained.

The panelists collectively agreed that the rule targets several key areas, including:

• Fake or manipulated reviews
• Review suppression practices
• Misleading influencer endorsements
• Review hijacking

These practices, previously addressed on a case-by-case basis, now face more comprehensive regulation under the new rule.

Key Areas of the Rule and Practical Takeaways

1. The Crackdown on Fake Reviews

Laura Kim highlighted the FTC’s renewed focus on businesses that misrepresent consumer feedback through fake or manipulated reviews. She cited previous cases like Fashion Nova and Sunday Riley, which involved suppressing negative reviews and posting fake positive ones.

“The rule’s clarity on fake reviews—whether they involve employees, influencers, or even AI-generated testimonials—means companies can no longer rely on outdated practices to shape consumer perceptions,” Kim noted.

What Brands Should Do:

• Audit current practices to ensure no fake or insider reviews are being posted without disclosure.
• Train employees on social media policies, particularly around writing reviews or endorsements for their own products.

2. The Rise of Review Suppression

Review suppression, another key provision of the rule, aims to combat practices like deleting or hiding negative feedback while showcasing only positive reviews. Matthew Fitzpatrick of Procter & Gamble shared how in-house legal teams can address these challenges.

“Transparency is critical,” Fitzpatrick said. “Evenly applied moderation policies and thorough documentation are your best defenses.”

Best Practices:

• Apply moderation policies consistently across all reviews.
• Avoid creating the false impression that your reviews represent an unbiased or complete sample.

3. Influencer Marketing and Disclosure Obligations

Viswanathan underscored the FTC’s heightened scrutiny of influencer marketing, emphasizing the importance of clear and conspicuous disclosures of material connections.

The panel discussed a recent NAD case involving Drunk Elephant, where influencers failed to properly disclose their paid partnerships, leading to compliance issues.

What In-House Counsel Can Do:

• Ensure influencer contracts include specific disclosure requirements.
• Monitor influencer posts for compliance, focusing on visibility and clarity.

4. Review Hijacking

Kim explained how review hijacking—assigning reviews from one product to another unrelated one—is now explicitly prohibited. She referenced the Bountiful case, where a company transferred positive reviews from older products to newer ones, misleading consumers.

“The FTC is serious about stopping practices that manipulate the perception of a product’s quality,” Kim added.

Action Steps:

• Avoid transferring reviews between products, even if they are in the same category.
• Use tools to monitor and ensure reviews are correctly attributed to the intended product.

5. AI and Consumer Reviews

The panel discussed the increasing use of generative AI to create fake reviews or testimonials. Viswanathan noted the FTC’s concern over how AI could scale deceptive practices.

“With generative AI, fake reviews can now be created at an unprecedented scale. The FTC is watching this space closely,” Viswanathan said.

How Brands Can Mitigate AI Risks:

• Vet third-party vendors to ensure they aren’t using AI to generate fake reviews.
• Use AI responsibly for monitoring compliance and transparency—not deception.

Enforcement and What’s Next

Viswanathan shared insights on the FTC’s enforcement priorities moving forward:

• Penalties for Violations: With fines of up to $43,792 per violation, the financial stakes are higher than ever.
• Coordination with NAD: The FTC’s partnership with the NAD ensures an additional layer of enforcement, with the NAD escalating non-compliant cases to the FTC if necessary.
• Spotlight on Influencers: Influencer marketing remains a key area of focus, particularly as consumer trust in these endorsements continues to erode.

“If your in-house colleagues are asking whether this rule really matters, remind them of the FTC’s recent actions,” Viswanathan advised.

Practical Guidance for In-House Legal Teams

The panel closed with practical advice for in-house counsel:

1. Establish Robust Policies

Develop clear guidelines for managing reviews, testimonials, and influencer content. Ensure these policies are widely communicated and consistently applied.

2. Monitor Compliance Regularly

Use technology to audit influencer posts and consumer reviews for compliance. Document any actions taken to address issues.

3. Educate Employees

Create training programs for employees, particularly those in marketing and social media roles, to ensure they understand disclosure requirements.

Why This Panel Matters

The insights from this panel reinforce the urgency for brands to align their practices with the new FTC rule. As enforcement actions ramp up, businesses must prioritize transparency, fairness, and compliance to build and maintain consumer trust.

“This isn’t just about avoiding fines,” Fitzpatrick concluded. “It’s about building a culture of trust with your customers and standing out in a crowded, competitive market.”

For legal teams, the message is clear: Proactive compliance isn’t just a regulatory requirement—it’s a business imperative.

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