Hunton Retail Law Resource

Fake reviews and testimonials for services and products have been under the watchful eye of the Federal Trade Commission (FTC) for decades. With the proliferation of online bots and generative Artificial Intelligence (AI) tools, reviews and testimonials have been even easier to fake in recent years. On August 14, 2024, the FTC announced the Final Rule on the Use of Consumer Reviews and Testimonials, prohibiting fake reviews and testimonials from being sold or purchased by businesses. Importantly, the Final Rule enables the FTC to seek civil penalties against knowing violators.

The Children’s Advertising Review Unit (CARU) of BBB National Programs recently announced it completed an investigation into Kidgeni, a generative artificial intelligence (AI) art creator website designed for children. CARU’s determined that Kidgeni is directed to children under 13 and is not in compliance with the Children’s Online Privacy Protection Act (COPPA) or CARU’s Privacy Guidelines.

On Friday, August 2, 2024, the United States sued ByteDance, TikTok, and its affiliates for violating the Children’s Online Privacy Protection Act of 1998 (“COPPA”) and the Children’s Online Privacy Protection Rule (“COPPA Rule”). In its complaint, the Department of Justice alleges TikTok collected, stored, and processed vast amounts of data from millions of child users of its popular social media app.

The FTC recently updated its “Made in USA” business guidance (see our prior reporting on the agency’s finalizing its “Made in USA” Labeling Rule). The updated business guidance reiterates the longstanding “all or virtually all” standard and explains that companies have an ongoing obligation to review their Made in USA claims in marketing materials, both to comply with the Made in USA Labeling Rule (for claims made on product labels) and with the FTC’s Made in USA Policy Statement (for claims generally). The FTC also applies the “Made in USA” standards to domestic origin statements like “Manufactured in USA,” “Built in USA,” “USA,” “true American quality,” and “Our products are American-made.” The staff provides new examples in the guidance to help businesses understand what kinds of Made in USA claims are covered.

The FTC announced a Notice of Proposed Rulemaking (NPRM) targeting misleading and hidden fees, commonly known as “junk fees,” and how businesses may advertise and market prices to consumers. The NPRM was drafted based on over 12,000 public comments to the FTC’s Advance Notice of Proposed Rulemaking published in November 2022.