Tag: ftc

U.S. Government Will Take Action Against Fake Reviews And AI-Generated Reviews

Review bombing has become a way of life, as shows like Star Wars: The Acolyte have been inundated with fake reviews bashing the series. Now, the Federal Trade Commission is taking action against fake reviews and A.I.-generated reviews. But this doesn’t mean that the federal government is going to show up at your door if you leave a negative review.

As laid out on the FTC’s official site, the new rule isn’t targeting individuals who write bad reviews out of spite. Instead, it’s going after reviews–either written by people or artificial intelligence–that accept compensation in return for favorable coverage and false testimonials. These practices artificially suppress real reviews, and often misrepresent their products.

“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” said FTC Chair Lina Khan in a statement. “By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

Essentially, companies will no longer be allowed to buy reviews without also stating that they were written by A.I. or by someone who never actually used the product. Businesses are also prohibited from offering real consumers any kind of incentive to leave a review, either positive or negative.

Keep reading

FTC Opens a Backdoor Route to Age Verification on Social Media

I hadn’t heard of the app NGL until recently. But that’s not surprising. The anonymous questions app seems to be largely popular among teens.

Bark, the maker of parental content-monitoring software, calls NGL “a recipe for drama” and cyberbullying. But it seems like a fairly standard social media offering, allowing users to post questions or prompts and receive anonymous responses.

Now, the Federal Trade Commission (FTC) has ordered NGL to ban users under age 18.

The FTC and the Los Angeles District Attorney’s Office say NGL “unfairly” marketed the app to minors. “NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment,” FTC Chair Lina M. Khan said.

To settle the lawsuit, the agency is not only making NGL pay $5 million, it’s also requiring the app to ban those under age 18 from using it.

This seems to me like a worrying development.

An administrative agency ordering a social media app to ban minors is effectively a backdoor way to accomplish what Congress has been failing to mandate legislatively and what courts have been rejecting when state lawmakers do it.

Granted, the FTC does not seem to be requiring NGL to check IDs. It’s merely “required to implement a neutral age gate that prevents new and current users from accessing the app if they indicate that they are under 18,” per the FTC’s press release.

But this is still the FTC setting minimum age requirements for some social media use, circumventing both parental and legislative authority.

Keep reading

Meta sues FTC, hoping to block ban on monetizing kids’ Facebook data

Meta sued the Federal Trade Commission yesterday in a lawsuit that challenges the FTC’s authority to impose new privacy obligations on the social media firm.

The complaint stems from the FTC’s May 2023 allegation that Meta-owned Facebook violated a 2020 privacy settlement and the Children’s Online Privacy Protection Act. The FTC proposed changes to the 2020 privacy order that would, among other things, prohibit Facebook from monetizing data it collects from users under 18.

Meta’s lawsuit against the FTC challenges what it calls “the structurally unconstitutional authority exercised by the FTC through its Commissioners in an administrative reopening proceeding against Meta.” It was filed against the FTC, Chair Lina Khan, and other commissioners in US District Court for the District of Columbia. Meta is seeking a preliminary injunction to stop the FTC proceeding pending resolution of the lawsuit.

Meta argues that in the FTC’s administrative proceedings, “the Commission has a dual role as prosecutor and judge in violation of the Due Process Clause.” Meta asked the court to “declare that certain fundamental aspects of the Commission’s structure violate the US Constitution, and that these violations render unlawful the FTC Proceeding against Meta.”

Meta says it should have a right to a trial by jury and that “Congress unconstitutionally has delegated to the FTC the power to assign disputes to administrative adjudication rather than litigating them before an Article III court.” The FTC should not be allowed to “unilaterally modify the terms” of the 2020 settlement, Meta said.

The FTC action “would dictate how and when Meta can design its products,” the lawsuit said.

Keep reading

The Federal Trade Commission’s Latest Frivolous Antitrust Suit Takes Aim at Amazon

The Federal Trade Commission’s (FTC) new antitrust lawsuit against Amazon is an amazing exercise in hubris and absurdity.

In a complaint filed Wednesday, the agency alleges that Amazon’s incredibly popular Prime program is a scam. Prime—a monthly or yearly subscription program that confers many benefits, including free shipping and tons of streaming content, to Amazon customers—is too easy to sign up for and too hard to cancel, the FTC alleges.

“Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime,” the agency said in a statement. “Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership.”

But these claims of deception fall apart upon close examination (as noted by my colleague Eric Boehm yesterday). The FTC’s complaint revolves around mundane moves by Amazon, like conspicuously asking non-Prime customers if they want to sign up or requiring Prime subscribers to click through several screens to unsubscribe.

Patrick Hedger, executive director of the Taxpayers Protection Alliance, noted that it took him under a minute and required just six clicks to cancel his Prime account—fewer clicks than it takes to submit a public comment on the FTC website.

Like many major companies, Amazon has some flaws. But the argument that it’s broadly harmful to consumers—let alone so harmful that it requires the intervention of the federal government—is so far removed from reality that only government bureaucrats with an ax to grind could make it with straight faces. (In fact, Amazon routinely garners extremely high favorability ratings in consumer polls.)

Keep reading