A great big phony
Ever get the feeling that 5-star review is not all that real? Sounds auto-generated or too similar to the rest of them? Well, the Federal Trade Commission has taken notice too, as consumer complaints pile up in the age of generative AI and e-commerce popularity. New rules are set to combat fake reviews and testimonials, while the agency will be allowed to seek civil penalties against knowing offenders.
Quote: “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” FTC Chair Lina Khan declared. “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.”
Besides bans on false reviews and testimonials, prohibitions will be applied to the censorship of negative reviews or compensating third parties for positive feedback. The rules also target deceptive practices surrounding AI-generated reviews or offering incentives to customers in exchange for writing specific comments. Buying or selling fake engagement such as likes, followers, or views on social media will be outlawed as well, and clarity about business connections or ties will be required if engaging in the review of a product.
What it means: Businesses will have to be more careful about how they manage reviews and may need to implement stricter guidelines or disclosures. That could translate into great responsibility for companies like Amazon (AMZN), Facebook (META), Google (GOOGL), Tripadvisor (TRIP) and Yelp (YELP). While false advertising is already illegal, the new ruling allows the FTC to seek up to $51,744 per violation, but it will ultimately be left to enforcement and the courts, which can impose much lower penalties depending on the case or size of a business.
Refinancing surge
As borrowing costs continue to decline, U.S. mortgage refinancing witnessed the largest increase since the early days of the pandemic. The refi index surged 34.5% over the course of one week, according to data from the Mortgage Bankers Association, and was up an astounding 118% when compared to the same week a year ago. Overall mortgage applications also continued to climb, with the latest cooling consumer price index setting the stage for the Fed to embark on an easing cycle in September. (2 comments)
Robo delivery
Shake Shack (SHAK) is the latest to partner with Serve Robotics (SERV) in using autonomous sidewalk robots to deliver Uber Eats (UBER) orders in Los Angeles. The news sent Serve’s shares soaring nearly 10% on Wednesday and the stock is up another 4% premarket. The all-electric and AI-powered bots, which look like boxes on wheels, are equipped with advanced GPS technology and are designed to eliminate noise and congestion in crowded urban areas. Speaking of robotics, Apple (AAPL) is reportedly moving forward with a tabletop prototype that has a display similar to an iPad and a robotic limb. (19 comments)
Bipartisan crypto?
Senate Majority Leader Chuck Schumer aims to “get something passed out of the Senate and into law by the end of the year,” he said during a virtual Crypto4Harris town hall. “Crypto is here to stay no matter what. So Congress must get it right.” While Kamala Harris hasn’t formally shared her views on crypto, a move by senior Democrats to support the industry indicates she may pivot away from the Biden administration’s harsh stance. Crypto has become a major topic in the election, with Republican nominee Donald Trump calling for the U.S. to be “the bitcoin superpower of the world.” (8 comments)
