News

Too Good to be True

  • July 09, 2016
  • By Hunters Law

Have you ever wondered about an online review for some form of goods or services that just sounded too good to be true – and probably was?  Online reviews and endorsements can have a big impact on consumer (i.e., your and my) buying decisions and it is therefore little surprise that retailers and service providers want to appear in the best possible light online.  Unfortunately, some of them can get a little carried away in the pursuit of that aim.  The UK Competition & Markets Authority (CMA) has been shining a light in recent months on a number of problem areas (as had the Office of Fair Trading before it), including:

  • businesses writing or commissioning fake positive reviews about themselves;
  • businesses or individuals writing or commissioning fake negative reviews (typically, to harm other competing businesses); and
  • review sites cherry-picking positive reviews or suppressing negative reviews that they collect and/or display (sometimes as part of their moderation processes), without making it clear to readers that they are presenting only selected views.

Unsurprisingly, these practices will normally breach the Consumer Protection from Unfair Trading Regulations 2008 and be unlawful.  A different but related issue is that of paid for endorsements, advertising or sponsored content in blogs, vlogs and other online and social media publications which are not clearly identified or identifiable as such and are not sufficiently distinguished from editorial content.  Again, equally unsurprisingly, if businesses fail clearly to identify and label for the benefit of the consumer where they paid bloggers or other online publishers to feature or promote a particular product as part of editorial content, such practices are unlawful and can lead to enforcement action.

Last year, the CMA published a detailed report on online reviews and endorsements and followed this up a few weeks ago with an open letter to marketing departments, marketing agencies and their clients, in which it clarifies legal requirements and explains best practices.  In addition to the CMA, Trading Standards Services also have powers to take civil and/or criminal action against cheats.  Often such enforcement action is triggered by consumer complaints.

There is also an extra layer of so-called ‘soft law’, such as the various advertising codes promulgated and enforced by the Advertising Standards Agency for everything from TV and radio advertisements to non-broadcast media, and self-regulatory codes of conduct for certain industry sectors.

And finally, many online platforms also take direct action themselves to detect fraudulent activity and shut it down: Facebook, for example, has rules in place as part of its terms and conditions of use to combat fake ‘likes’, i.e., ‘likes’ created by fake accounts or people without real intent.  Facebook has a strong incentive for doing so: businesses and people who use its platform want real connections and authentic results.  If a platform loses credibility and trust amongst its users and subscribers, both it and its advertisers will end up doing less business in the long run.

Online reviews and endorsements are a feature of online life; where they are used, this must be done honestly and openly so that they remain meaningful and useful.  Common sense, really, and good to know that you can do something about those who do not play by the rules.

This article was originally published in Discover Germany and can be found here.

Gregor Kleinknecht

Hunters incorporating May, May & Merrimans

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