Articles 8th Jul 2015

The Truth And Nothing But The Truth – The CMA And Online Reviews

How routine it is to be asked to “leave a review”; much of our on-line shopping or holiday bookings will end up with a request for a review. If you have ever wondered who on earth has the time in their day to bother, the Competitions and Marketing Authority has partly answered the question by revealing that amongst the plethora of reviews a significant proportion are bogus, either being false positives or falsely negative reviews.

In its Report “Online Reviews and Endorsements Report on the CMA’s call for information” released 19th June, the CMA’s research has identified that 54% of adults read on-line reviews. The CMA estimates that £23 billion of UK consumer spending is potentially influenced by on-line reviews. Furthermore, between 76% and 80% of customers thought it “very likely” or “fairly likely” that the reviews had been written by genuine customers. Although the reassuring picture in practice is that of those surveyed only between 4 % and 8% felt that their experience was a “little worse” or “much worse” than the experience suggested by the reviews, nonetheless there remains a not insignificant cohort whose disappointment may lie not such much down to bad luck or unrealistic expectations, but positive cheating, to put it bluntly.

So, given the optimistic confidence rating (and our intrinsically trusting natures), and the scale of the turnover at stake, it is unsurprising to discover that there are unscrupulous “reviewers” who are out to inflate artificially their product. What is more sinister is the flip side of writing deliberately false reviews to undermine the market worth of a competitor.

The Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) [in force May 2008] implemented the Unfair Commercial Practices Directive UCPD into English law. Regulation 3 of the CPR contains a general prohibition on unfair commercial practices. In summary the over-arching concept is one of professional diligence – honest market practice and good faith – to prevent the distortion of the economic behaviour of the average consumer. So deciding to prefer one resort hotel over another based on a bogus review favourable to the one you click on would be distorting the economic behaviour of the holiday maker. Regulation 5 prohibits misleading action, that includes giving consumers false information, or, perhaps more importantly, deceptive presentations which are not actually factually incorrect – so no more “economical with the actualite”.

Enforcement around the world still seems to be at either the consultation and guidance stage, with agencies using undertakings and, and in the United Kingdom the Advertising Standards Agency using its adjudications processes against misleading advertising. It seems, according to the CMA’s Report, that the toughest approach so far seems to be France, Italy (fines) and the USA (enforcement action brought by the New York State Attorney General’s Office). Here, some breaches of the CPRs can carry criminal sanctions and those offences include contravention of the general prohibition on unfair commercial practices and misleading practices.

This recent assessment of the real problem of bogus on-line reviewing, in its context of a valuable market economically and a ripe field to exploit in terms of a largely trusting population, is a headache that may well need tough action to try to deter the more systematically unscrupulous. Into the future, no business or its legal advisors should be left under any misapprehension that such bogus behaviour may simply be a matter between one’s client and the ASA, as the CMA has set out its expectations going forward, amongst a lengthy list [paragraph 1.14]: no business should pretend to be a customer or write fake reviews, no business should unreasonably delay bad reviews, businesses should have in place appropriate procedures to detect, remove and act promptly as regards suspected fake reviews. At paragraph 1.20 the CMA sets out its clear position of continuing to work and “if we find evidence of consumer law breaches, this may lead to further enforcement work by the CMA and our partners.”

So although the truth might hurt, the prudent advice is to leave it unvarnished to avoid some potentially serious and unwelcome public economic and financial damage being done through the law enforcement arena.

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