Bill Summary:
This bill aims to protect small businesses from the harmful effects of deceptive, fake, or misleading online reviews by promoting transparency and accountability in online review platforms. The bill mandates stricter regulations on platforms hosting reviews, like Google and Yelp, to ensure a fair and accurate representation of businesses.
Section 1: Findings and Purpose
• Findings:
• Many small businesses across the United States experience financial harm and, in some cases, are forced to shut down due to the impact of fake or misleading online reviews.
• Legitimate, long-standing businesses can appear less reputable than newly established or unlicensed competitors due to manipulative review practices, affecting consumer trust and purchasing decisions.
• Many reputable companies with decades of positive service history are unfairly rated lower than newer companies due to the disproportionate impact of negative reviews.
• There is a growing problem of individuals or companies creating fake reviews to undermine competitors or boost their ratings, exploiting consumer trust in review platforms.
• Purpose:
• To ensure that online review platforms maintain fair practices that do not unfairly advantage or disadvantage businesses based on misleading or unverified reviews.
• To hold online review platforms accountable for allowing reviews that could mislead consumers and damage the reputations of legitimate small businesses.
• To establish standards for transparency, requiring platforms to identify unverified and potentially misleading reviews.
Section 2: Requirements for Online Review Platforms
- Transparency and Verification Standards:
• Platforms must display clear indicators on reviews to differentiate between verified and unverified customers.
• Platforms must disclose their criteria for determining which reviews are shown and which are suppressed, including any algorithms or methods that may skew visibility toward certain reviews.
- Complaint and Resolution Mechanism:
• Review platforms are required to create a transparent and accessible complaint mechanism for businesses to report suspicious or harmful reviews.
• If a review is found to be false, deceptive, or misleading, the platform must take prompt action to remove it and inform the business of the outcome.
- Disclosure of Conflicts of Interest:
• Platforms must disclose any partnerships, paid promotions, or other financial interests that could affect the visibility or rating of a business on their platform.
• A business cannot be penalized in search results or rating algorithms based on financial arrangements with the platform.
- Consumer Education and Verification Efforts:
• Platforms must educate consumers on responsible review practices, emphasizing the importance of truthful and balanced reviews.
• Platforms should implement safeguards to verify reviews before publication, especially those originating from new or anonymous accounts.
Section 3: Penalties and Enforcement
- Penalty for Non-Compliance:
• Online review platforms found in violation of these standards will be subject to fines and possible sanctions.
• Repeated non-compliance may result in additional regulatory oversight or legal action.
- Enforcement Agency:
• The Federal Trade Commission (FTC) will be responsible for monitoring compliance and enforcing penalties.
Section 4: Encouraging Positive Reviews from Verified Customers
• The bill encourages businesses to actively seek feedback from verified customers by offering incentives for verified positive reviews that comply with ethical standards.
• Platforms must allow businesses to request reviews from verified customers without fear of penalties, enabling more balanced representation of customer satisfaction.
This bill aims to establish a fair marketplace by addressing the disproportionate impact of misleading reviews and ensuring that consumers can trust the accuracy and fairness of online review platforms.