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Following a call for information, the UK's Competition and Markets Authority has now opened an investigation into a number of companies in connection with online reviews and endorsements, and in particular, is looking into potential non-disclosure of paid endorsements.
The call for information found that online reviews are trusted by consumers and are an important source of information for buying decisions.
There were a number of practices that gave rise to concerns:
- Businesses wrote or commissioned fake positive reviews about themselves to boost ratings on review sites. This could mislead consumers and may lead them into making buying decisions they would not otherwise make.
- Businesses or individuals wrote or commissioned fake negative reviews. This was particularly common in the hospitality industry and small businesses were particularly badly affected by fake negative reviews.
- Review sites 'cherry-pick' positive reviews or suppress negative reviews without making it clear that they are presenting only a selection of reviews. This could mislead consumers and may result in some businesses losing custom as a result of the way in which reviews were presented.
- Review sites' moderation processes potentially cause some negative reviews not to be published. Some sites do not publish genuine negative reviews and instead encourage businesses to take action to resolve customer complaints. This could impact on consumer choices, particularly if they are not aware that this practice is taking place.
These sorts of practices are likely to breach the UK's consumer protection rules and Advertising Codes.
If you would like to discuss these issues please do not hesitate to contact John Cassels at email@example.com