In a significant move to combat deceptive practices in online marketplaces, the Federal Trade Commission has implemented a ban on the creation, purchase, or sale of fake reviews.

The new regulation stipulates hefty fines — up to $51,744 — for any individual or entity involved in generating fraudulent online testimonials, including those crafted by artificial intelligence.

The rule, unanimously supported by the commissioners, aims to curb the surge of AI-generated reviews, which have recently plagued platforms like Amazon. Furthermore, the ruling targets misleading celebrity endorsements and testimonials posted by a company’s employees, relatives, or friends, unless they are accompanied by clear disclaimers.

Brands are also prohibited from offering incentives to encourage the dishonest practices. In addition, the rule bans the suppression of negative reviews and insists that businesses refrain from promoting reviews they know, or should reasonably know, to be fake.

“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,” the FTC chairman, Lina Khan, said in a statement.

The introduction of the rule marks a pivotal moment in addressing the widespread issue of fake reviews. In a related effort, Google recently updated its review policy, imposing new restrictions on business profiles that violate its guidelines.

Businesses found guilty of hosting fake reviews will face sanctions such as temporary suspension of new review submissions and the display of warning messages to users.