The Federal Trade Commission (FTC) has proposed a formal ban on fake reviews and testimonials. Companies would also be prohibited from using phony followers and views to inflate their social media metrics if the rule takes effect as it stands.

This isn't the first time the agency has trained its sights on fake reviews. In its first such case in 2019, it fined a third-party Amazon seller for paying for fake reviews (Amazon itself has sued phony review providers). Earlier this year, the FTC levied a $600,000 penalty against the owner of a vitamin brand for “review hijacking" on Amazon.

The new rule, which the agency said it was working on in October, is close to being finalized and it includes steep penalties for those caught peddling fake reviews and testimonials. As The Washington Post points out, the FTC plans to slap businesses that "buy, sell and manipulate online reviews" up to $50,000. Not only is that fine for each phony review, it's also for every time a consumer sees it. So, if the FTC finds out that one fake review has been viewed just 20 times, the business that bought it could be on the hook for $1 million.

“Our proposed rule on fake reviews shows that we’re using all available means to attack deceptive advertising in the digital age,” Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, said in a statement. “The rule would trigger civil penalties for violators and should help level the playing field for honest companies.”

Explicitly, the FTC aims to ban "businesses from writing or selling consumer reviews or testimonials by someone who does not exist, who did not have experience with the product or service, or who misrepresented their experiences." Similarly, companies won't be allowed to obtain or disseminate reviews and testimonials that they "knew or should have known that they were fake or false."

Repurposing an existing review to make it appear that it was written for a different product (i.e. review hijacking) will be outlawed, as will offering payments or other kinds of compensation for positive or negative reviews. The FTC says companies can still ask users to leave a review, as that's an important way for small businesses to enhance their reputations.

Managers and officers won't be allowed to post reviews of their company's products without clear disclosures and nor can they ask family members or employees to do so in certain circumstances. Under the proposed rule, companies won't be allowed to run websites that claim to offer independent reviews of categories of products and services that include their own offerings.

Review suppression will be banned as well. Companies won't be allowed to use intimidation tactics, such as legal threats and false accusations, to push customers to remove or avoid leaving a negative review.

In addition, the FTC seeks to ban companies from using fake followers and views to fluff up their social media numbers. "The proposed rule also would bar anyone from buying such indicators to misrepresent their importance for a commercial purpose," the agency said. This is a provision that could have far-reaching consequences beyond commerce — influencers may have to ensure they don't factor in bots when they try to secure brand deals.

Meanwhile, the proposed notice for the rule takes note of the popularity of generative AI. "It has been reported that an AI chatbot is being used to create fake reviews," it reads. "As the reporting notes, the widespread emergence of AI chatbots is likely to make it easier for bad actors to write fake reviews."

The rule won't take effect immediately. It will be open to public comments for a 60-day period, after which the agency will consider changes before finalizing the directive.

A lot of these provisions make sense. In essence, the FTC is trying to ensure that businesses and brands are transparent and honest with consumers. Actually enforcing these measures, however, is a different matter. The agency told the Post that it won't be getting extra resources to tackle purveyors of fake reviews, but a codified rule can strengthen its hand in court. Taking on companies based overseas that sell and post phony reviews might be a difficult task too. Still, a formal ban on these practices and the threat of eye-popping fines may be enough to deter some companies from using fake reviews.

Google has denied "extremely inaccurate claims" that it may have violated its own rules and misled advertisers over ad viewership on third-party websites. 

Through the Google Video Partners network and TrueView (an ad product that's also used on YouTube), the company handles placement of video ads on external websites and apps. According to The Wall Street Journal, Google tells brands that their ads will be on "high-quality" sites, appear before the main content of a video and run with audio on. It also says that advertisers won't pay if users skip the ads. However, a third-party analytics company suggested in a report that Google fails to live up to these standards around 80 percent of the time.

Adalytics said the ads often appear on lower-quality websites, such as those with misinformation or pirated content, and that they can be positioned in small video players on the side or bottom of the screen, away from the main "in-stream" content. Some of the ads run without any audio, according to the report, while in other cases, there were was "little to no video content in between consecutive TrueView ads." Adalytics says other ads autoplayed without the viewer engaging with them.

In some instances, the company notes, the skip button that typically appears after five seconds was obscured, forcing viewers to watch the whole ad. That's "a direct violation of Google’s quality standards for TrueView ads," Adalytics says, and it may have contributed to artificially inflated ad metrics, leading to advertisers paying more.

Adalytics reviewed ad campaigns for more than 1,100 brands between 2020 and this year. It says customers that might have bought "muted, auto-playing, mis-declared TrueView skippable in-stream inventory include" the US government, the European Parliament, Disney+, HP, Samsung, Sephora, TikTok, Microsoft and General Motors. As it happens, some other Google divisions (Google Career Certificates and Google Workspace Domains) are on the list.

Media buyers Adalytics shared the report with accused Google of conducting "ad fraud" and suggested brands weren't getting what they paid for. Others have demanded a refund. The "misalignment" could have cost brands billions in advertising dollars, Adalytics said. One "major consumer goods brand" found that 20 percent of a $75,000-plus campaign budget was directed toward YouTube channels, with the remainder spent on ads that ran on third-party destinations such as investing.com and Candy Crush Saga.

Google has firmly rejected the report's findings. The company's global video solutions chief, Marvin Renaud, asserted in a blog post that Adalytics "used unreliable sampling and proxy methodologies." An "overwhelming majority of video ad campaigns" run on YouTube, Renaud claimed, with brands having the option to opt out at any time from running their ads on Google Video Partners-affiliated apps and websites.

Even so, over 90 percent of Google Video Partners "are visible to people across the web," Renaud argued. "We use real-time ad quality signals to determine if people are present and paying attention that help us decide whether to serve a video ad in a Google Video Partner site or app."

In addition, Renaud wrote, Google rigorously enforces policies that prohibit third-party sites from using deceptive or disruptive techniques to generate advertising revenue, such as placing ads in hidden browser windows. Renaud added that, last year, Google stopped running ads on more than 143,000 websites it deemed to violate its rules.

The Adalytics claims come as Alphabet faces close scrutiny over its advertising practices. The Department of Justice sued the company earlier this year in an attempt to break up its ad business. This month, the European Union said in a preliminary finding that the only remedy it could see for Google to address its antitrust concerns would be to sell off part of the advertising empire.

Apple is once again in trouble for its union-busting practices. The National Labor Relations Board (NLRB) judge ruled Apple interfered with employees' organizing efforts at its World Trade Center store in New York City after workers, Bloomberg reported. Managers were found to have taken away pro-union flyers in the break room and attempted to dissuade employees from joining unions, which prosecutors argued had led employees to end the organizing campaign. A judge ordered Apple "cease and desist from coercively interrogating employees regarding their protected concerning activities and Union sympathies." 

The news broke in early 2022 that Apple store workers nationwide were quietly organizing in response to concerns that their wages didn't reflect the rising cost of living. However, Apple soon hired the anti-union law firm Littler Mendelson, which also represents Starbucks and McDonalds, among others. The company also instructed store managers to share anti-union sentiments, such as warning employees that joining a union could bring reduced pay, career opportunities and time off. That May, the Communications Workers of America filed Unfair Labor Practice charges for the Apple stores in the World Trade Center and Atlanta's Cumberland Mall. 

Union efforts are slowly gaining ground at Apple stores across the country. The NLRB previously found Apple had violated federal law in Atlanta, including daily mandatory anti-union meetings for employees and interrogating workers. Last year, employees at an Apple store in Maryland and another in Oklahoma voted to unionize. Yet, other locations like the St. Louis branch abandoned plans to unionize, blaming similar tactics by Apple. 

Gannett, a news publisher accused of monopolistic behavior, is suing Google for monopolistic behavior. It’s the latest in a string of lawsuits against the search giant, and it repeats many of the arguments made by the Department of Justice in its second lawsuit against Google, filed earlier this year. Gannett is the US’ largest news publisher. “Google has monopolized market trading to their advantage and at the expense of publishers, readers and everyone else,” Gannett CEO Mike Reed said toCNBC. “Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”

Gannett, which owns USA Today and various local papers, says Google has overly broad control over the online ad business, leading to diminished ad spending despite growing online readership. The crux of the complaint is that Google owns the largest ad exchange and ad server — both acquired rather than built organically — and that arrangement has led to diminished industry revenue.

“Content providers, including hundreds of our local news outlets, create enormous value but see none of the financial upside because Google, as middleman, has monopolized the markets for important software and technology products that publishers and advertisers use to buy and sell ad space,” Gannett CEO Mike Reed wrote today. “Google trades on that conflict of interest to its advantage and at the expense of publishers, readers and everyone else. Our lawsuit details more than a dozen significantly anticompetitive and deceptive acts by Google, starting as early as 2009 and persisting to present day.”

In a statement to Engadget, Google insisted that its services are popular because they’re the best — not due to a lack of competition. “These claims are simply wrong. Publishers have many options to choose from when it comes to using advertising technology to monetize — in fact, Gannett uses dozens of competing ad services, including Google Ad Manager,” VP of Google Ads Dan Taylor said. “And when publishers choose to use Google tools, they keep the vast majority of revenue. We’ll show the court how our advertising products benefit publishers and help them fund their content online.” Google says the average large publisher will use six different platforms to sell ads on its websites, while advertisers and media agencies will use over three platforms to buy ads. The search giant describes its ad tech fees as transparent and consistent with industry rates.

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However, Gannett’s complaints are similar to those of the DOJ, which filed a suit in January (alongside eight states) to break up Google’s advertising business. “Google’s anticompetitive behavior has raised barriers to entry to artificially high levels, forced key competitors to abandon the market for ad tech tools, dissuaded potential competitors from joining the market, and left Google’s few remaining competitors marginalized and unfairly disadvantaged,” the Justice Department alleged at the time. It was the DOJ’s second lawsuit against Google, following one filed in 2020 under former Attorney General Bill Barr, accusing the company of having a monopoly over search and search-related advertising.

Gannett’s and the DOJ’s most recent lawsuits claim Google has stifled competition in the space through acquisitions. “Whenever Google’s customers and competitors responded with innovation that threatened Google’s stranglehold over any one of these ad tech tools, Google’s anticompetitive response has been swift and effective,” the DOJ said.

Gannett is no stranger to monopolistic accusations. Although the company is over 116 years old, it was acquired by New Media Investment Group and merged with GateHouse Media (taking on the Gannett brand) in 2019. Since the merger, Gannett has laid off over half its workforce and shut down numerous local news outlets. In the period immediately following the acquisition, Gannett “owned 261 daily and 302 weekly newspapers,” according toNieman Lab. “By the end of 2022, those totals were 217 daily and 175 weekly newspapers,” although some were due to selling papers to local buyers. In addition, the company went from about 25,000 employees at the time of the acquisition to 11,200 in its most recent filing report.

The Securities and Exchange Commission and Binance have come to an agreement that will allow the cryptocurrency exchange to continue operating in the US until a lawsuit filed by the SEC earlier this month is resolved. The regulator sued Binance and founder Changpeng Zhao, better known as CZ, on June 5th, alleging the company had artificially inflated trading volumes, mixed and diverted customer assets and failed to restrict US investors from trading on Binance.com when they were supposed to stay on a separate US system.

After announcing the charges, the SEC sought to freeze Binance’s US assets. The regulator said the move was necessary to protect customer funds and prevent the company from potentially moving money abroad. Binance, meanwhile, argued an asset freeze would put it out of business in the US. On Tuesday, the judge overseeing the litigation ordered the two sides to come to a compromise that would safeguard customer assets. 

In a court filing seen by The New York Times, the SEC said Friday that Binance had agreed to move all assets belonging to US customers stateside. Additionally, the company’s US operation is prohibited from providing access or control of domestic assets or funds to Binance’s international operation or Zhao. Until the ligation is resolved, Binance.US is "solely" allowed to transfer assets “to make payments for expenses or to satisfy obligations incurred in the ordinary course of business.” Additionally, the exchange is required to create new customer wallets which its international employees can’t access. The deal still needs approval from Judge Amy Berman – and won’t resolve the SEC lawsuit even if it’s put in place.

“Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets,” the SEC said Saturday. “Further, we ensured that US customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged securities law violations.”

Zhao took to Twitter on Saturday morning to comment on the deal. “Although we maintain that the SEC's request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms,” he posted. “User funds have been and always will be safe and secure on all Binance-affiliated platforms.”

The SEC’s lawsuit against Binance is part of a broader crackdown by the watchdog against the crypto industry. At the end of last year, the agency accused FTX founder and former CEO Sam Bankman-Fried of carrying out an alleged multi-year scheme to defraud investors. One day after suing Binance, the SEC filed a complaint against Coinbase, the largest crypto trading platform in the US, alleging the company had failed to register as a broker, national securities exchange or clearing agency.

The office of Texas State Attorney General Ken Paxton has requested that Pfizer and several other companies turn over advertising data tied to the social media giant Meta. The lawsuit was filed after consumer data privacy concerns were raised by the state in its latest legal battle with Meta, according to a report by Law360. The Texas Attorney General claims that millions of Texas residents have had their private biometric data misappropriated over the past ten years.

The order requires the vaccine maker to share any records it holds regarding Meta’s use of facial recognition technology over claims that the company was collecting biometric data from Facebook users without their consent. This decree over Pfizer’s records follows a February 2022 filing against Meta by the Texas Attorney General that claimed “Facebook knowingly captured biometric information for its own commercial benefit” in order to “train and improve” its in-house facial recognition technology powered by AI. The Texas lawsuit cites Facebook founder and CEO Mark Zuckerburg’s commentary that photo tagging is “more important than every other [Facebook] feature put together” as evidence in their case against the company under a section that highlights its allegations against the company. The February 2022 petition against Meta over data privacy concerns came shortly after Facebook decided to discontinue its face recognition systems in 2021. Meta said its move to cut back on its facial recognition tech development was necessary because of the lack of regulator guidelines.

The Texas Attorney General has been aggressive in its pursuit of Meta’s data on the issue. The state has cast a wide net with its series of lawsuits, subpoenaing a number of other big-name companies affiliated with the company through its advertising arm. Pfizer is just one of many companies subpoenaed in the attempt to discover data incriminating Meta. Others ordered to turn over advertising data include Procter & Gamble, Home Depot, The New York Times, SmileDirectClub and Clarity Media Group. Although the exact investment value of Pfizer’s advertising deals with Meta are undisclosed, we do know the company’s “selling, general, and administrative expenses,” which include marketing and advertising, reached a whopping $34 billion in 2022.

Meta is hardly the only name in big tech being targeted by the Texas AG over data privacy concerns. Google is similarly facing the Texas Attorney General in court over its facial data collection practices. Last year, Google was sued by Texas for engaging in “years-long practices” of capturing biometric data from millions of Texans without consent. In that same year in a separate lawsuit with the state of Illinois, Google paid $100 million to settle a class action that accused the tech giant of violating the Biometric Information Protection Act. The case resembles the Texas suit filed against Meta, which claims the company violated Texas’ Capture or Use of Biometric Identifier Act. Confirmation that a violation of that specific Texas act by Meta can result in a penalty of up to $25,000 per violation of the law. So far, an infraction fine against the social media giant has not been determined.

Both Pfizer and the Texas AG office could not be reached to comment on the ongoing case.

Twitter has yet another major lawsuit to contend with. A group of more than a dozen music publishers has filed a $250 million lawsuit against the company over allegations of “massive” copyright infringement on the platform.

The suit, filed by the National Music Publishers Association, alleges Twitter users have violated artists’ copyrights on thousands of occasions and that the company has done little to stop it. It notes that Twitter is among the only major social platforms that doesn’t have licensing agreements in place.

According to The New York Times, Twitter had been in negotiations for such a deal but those talks eventually broke down. “While numerous Twitter competitors recognize the need for proper licenses and agreements for the use of musical compositions on their platforms, Twitter does not, and instead breeds massive copyright infringement that harms music creators,” the filing states.

The lawsuit also accuses Twitter of ignoring music publishers’ requests to take copyright infringing material off its platform despite weekly notices from publishers.“The reality is that Twitter routinely ignores known repeat infringers and known infringements, refusing to take simple steps that are available to Twitter to stop these specific instances of infringement of which it is aware,” the lawsuit says,

The suit also claims many offending tweets are now shared by verified users, and that Twitter is likely to take action against verified accounts. “Twitter suspended virtually none of the verified accounts identified in the NMPA Notices and which have large follower bases,” the suit says. “Twitter gives them preferential treatment, viewing accounts that are verified and have large follower bases as more valuable and monetizable than accounts that are unverified and have a small number of followers.”

Though the lawsuit says that copyright infringement has been a problem at Twitter for years, it says things have gotten worse since Elon Musk took over the company and that things are in “disarray” internally. Of note, the suit also cites tweets from Musk himself, in which he criticized copyright law, calling the “overzealous DMCA [Digital Millennium Copyright Act]” a “plague on humanity.”

“This statement and others like it exert pressure on Twitter employees, including those in its trust and safety team, on issues relating to copyright and infringement,” the music publishers say.

Twitter didn’t respond to a request for comment.

Europe has accused Google of "abusive practices in online advertising technology" that could lead to its ad business being split up, the EU Commission wrote in a statement of objections. It found preliminarily that since Google is unlikely to change its behavior, only the "mandatory divestment" of part of its services would address competition concerns.

"Google is present at almost all levels of the so-called adtech supply chain," executive VP Margrethe Vestager said in a statement. "Our preliminary concern is that Google may have used its market position to favor its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs."

Google's ad business is now under attack on several fronts. Earlier this year, the US Department of Justice (DoJ) sued Google to break up its ad business, accusing it of illegally monopolizing the market. That in turn forced key ad tech rivals to abandon the market, dissuade new ones from joining and left the few remaining competitors "marginalized and unfairly disadvantaged," the regulator said.

There is nothing wrong with being dominant as such. What our investigation has shown though, is that Google appears to have abused its market position. It did so by ensuring that both its intermediation tools on the buy- side and on the sell-side would favour AdX in the “matching” auctions.

The EU Commission said Google is dominant in virtually all parts of adtech via services for both advertisers and publishers, along with an ad exchange called AdX. That would be fine by itself, but it accused Google of abusing its market position by making sure both its buy- and sell-side intermediation tools would favor its own exchange. "In other words, we are concerned about two potentially anticompetitive conducts by Google, which are both about favoring AdX," the Commission wrote.

In one case, AdX was able to bid after all other bidders had done so, and in another, it was informed in advance of the value of the best bids from rivals. On the supply side, Google Ads placed bids nearly exclusively on its own exchange, giving it a significant advantage over competitor's exchanges, according to the EU.

The Commission said that any remedy demanding Google change its behavior would be ineffective. "The Commission's preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns," according to the statement of objections.

Google will now be able to respond to the complaint before any judgement is issued. On top of being split up, the company could face a fine of up to 10 percent of its yearly global turnover, pending any appeal. It's unusual for the EU to suggest any remedy ahead of a guilty judgement, The Wall Street Journal noted. Engadget has reached out for a statement from Google.

The FTC has notched a win, albeit a temporary one, in its bid to prevent Microsoft from closing its deal with Activision Blizzard. According to The Financial Times and Bloomberg, a US federal judge has issued an order that temporarily blocks the companies from finalizing their $68.7 billion deal while waiting for the court to decide on the FTC's request for a preliminary injunction. If you'll recall, the agency has filed for an injunction in response to news reports that the companies were closing the deal "imminently" and that they had set July 18th as the target deadline for the acquisition.

Judge Edward J. Davila has ruled that the merger can't take place until five days after the court has decided on whether or not to issue an injunction against it. To note, the court is scheduled to hear the FTC's request for an injunction on June 22nd and 23rd, so the earliest the companies can proceed with their plans is the end of this month — if the court doesn't ultimately side with the agency. The commission said in its filing:

"With control of Activision's content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition — including competition on product quality, price, and innovation."

Microsoft and Activision Blizzard, however, seem to be unperturbed by the FTC's lawsuit. In a statement, Microsoft told us that the injunction request is "accelerating the legal process" that will help the merger move forward sooner. "A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly," a spokesperson also told The Times. 

In May, the European Union approved the acquisition, as long as Microsoft agreed to release popular Activision Blizzard games on competing cloud gaming services. But the companies still have to convince US and UK authorities to allow the merger to push through. The FTC filed an antitrust complaint in December 2022 to block the deal over worries that it "would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business." That particular lawsuit was filed at the agency's in-house court, and the commission's administrative law judge is scheduled to hear the case in August. 

Reddit is going through a restructuring, and according to an email by company chief Steve Huffman as seen by The Wall Street Journal, one of the moves it's going to make is laying off 90 employees. That's around 5 percent of the company's current workforce with 2,000 employees. 

In addition, Reddit is slowing down hiring this year and reducing the intake of new workers to 100 from the 300 personnel it had originally planned. Apparently, the social network wants to focus on achieving its biggest goals, such as breaking even next year. Huffman reportedly wrote in the email that Reddit has "had a solid first half of the year," and that this restructuring will position it "to carry that momentum into the second half and beyond."

This is but one of the moves Reddit is taking in an effort to earn money: Back in April, it also announced that it will start charging developers for access to its API. The company made the decision just as the biggest players in tech got into generative AI, which is typically trained using data from the internet accessed via API. "[A]s a platform with one of the largest corpus of human-to-human conversations online, spanning the past 18 years, we have an obligation to our communities to be stewards of this content," the company said. 

While Reddit may have been looking to earn from large companies, even independent developers are affected by its decision. Christian Selig, the sole developer of Apollo for Reddit, said it would cost him $20 million a year to keep his app running as is. Other third-party apps, such as Narwhal and Reddit is Fun, have already warned users that they can't afford paying for Reddit's API and will likely shut down. Dozens of subreddit communities across various topics are now planning to go dark starting on June 12th as an act of protest. Some of them plan to remain inactive for 48 hours, while others intend to stay dark permanently until Reddit addresses the issue.