Fake reviews are bad for customers and bad for business. In a worst case scenario an abundance of fake reviews can skew the marketplace away from ethical traders whilst leaving consumers out of pocket when buying unsuitable goods or services.
So much so that research by the Department for Business and Trade (DBT) estimated that fake reviews cost UK consumers £312m per year. The DBT also comment that the true cost is likely to be higher once the effect of inflated star rankings is taken into account. That figure might seem high, but not when you take into account that DBT research also estimated that 11% to 15% of reviews on popular platforms are fakes.
These statistics were released in the wake of a consultation launched by the Government in September into fake reviews and hidden fees. The measures being considered within this consultation are expected to be brought in via secondary legislation which will amend clause 18 of the Digital Markets, Competition and Consumers Bill. This Bill is currently going through Parliament. Headline measures include:
Banning organisations from commissioning someone to write or submit a fake review;
Requiring organisations to take reasonable and proportionate steps to check that reviews are genuine and not misleading to consumers before posting them;
Making it an offence to offer or advertise to submit, commission, or facilitate fake reviews.
From micro to large businesses
The Competition and Markets Authority is to take the lead on implementing and overseeing the fake review regulations. This will include providing guidance on measures to be taken by organisations in order to ensure compliance.
It is interesting to note that all organisations will be expected to comply; so even small and micro organisations will not be exempt. However, the consultation comments that the reasonable and proportionate steps expected of small and micro businesses will be more straightforward than the complex technical solutions required of larger entities.
Businesses are to be allowed a one-year transition period in order to change their processes and systems so that they comply with the new regulations. It is therefore anticipated that the measures will ‘go live’ in 2025.
Writing about the new proposals Rocio Concha, Which? Director of Policy and Advocacy said: “The measures being consulted on will address longstanding concerns to help consumers make better informed decisions - whether shopping for products online or buying a weekly shop in the supermarket. Our research shows that fake reviews jeopardise consumer trust and are harmful to honest businesses that don’t purchase or incentivise people to post positive reviews.”
Director of Elemental CoSec, a company secretarial firm. Lawyer. Triathlete.
Elemental is one of the leading corporate services firms in the UK, providing company secretarial services, administrative services, accountancy services and corporate services to a full range of clients.