If you give me your book for free in exchange for a review, what benefit is there to me to leave a dishonestly positive review? If I think your book stinks, why would I leave a positive review? So you give me your next smelly book for free? Why would I want to waste my time reading another bad book so I can leave another glowing review so I can get the next bad book free and repeat the cycle?
The only way I benefit in such a scenario is if I'm reselling the free books. But, really, the only way to make a decent income that way or even enough of an income to offset my time, would be to skim the books (or not read them at all), leave positive reviews and keep the cycle going. Which means I'd be leaving reviews at a rate faster than I could have possibly read the books.
So, maybe the key there is for Amazon or whoever to develop and use an algorithm that detects reviews left at a faster pace than the books could have been read. That would be a red flag that something untoward is happening.
Also, if I recall correctly, there have been studies that have shown people are more likely to praise something they purchased (as a way of justifying their purchase to themselves and/or others) than something they got for free.
If you think about it then, the whole review system is inherently defective because, for the most part, people don't behave rationally.
If you limit reviews to verified buyers, then statistically you're going to end up with more positive reviews due to the proclivity to praise something you have purchased as a means of justifying said purchase.
The best option, which is already a requirement, is disclosure as to the nature of the relationship between the reviewer and the item reviewed. Enforcement would be the difficult thing, though the low-hanging fruit would be reviews that have no disclosures.
As far as the FTC proposals go, I don't have a lot of confidence that their proposals, if implemented, would make things any better. Let's say, for example, I am not an author. Let's say Lily Billy Hawke is a popular writer whose books I find abhorrent for whatever reason. Lily Billy Hawke can't buy followers or, by the looks of it, even allow people to post reviews on their own website but, me, as a non-commercial entity that is neither an author or a business, could buy myself some followers, tweet about how awful Lily Billy Hawke's books are, set up a review site I control and post fake reviews on Lily Billy Hawke's books, suppress any positive reviews that might get posted, and what recourse would Lily Billy Hawke have? How would Lily Billy Hawke know the negative reviews are fake? Lily Billy Hawke could sue, but what if the reviews weren't fake? Then it looks like review suppression and then Lily Billy Hawke is in trouble with the FTC. Win-win for me, right?