Who: UK Competition and Markets Authority (CMA)
Where: United Kingdom
When: 22 May 2020
Law stated as at: 9 June 2020
What happened:
The CMA has launched an investigation into fake and misleading reviews on several undisclosed major websites. The investigation was launched on 22 May 2020 to examine if online shops are doing enough to protect customers turning to online shopping during the lockdown.
In particular, the CMA is looking into the following issues:
- suspicious reviews (for example, where a single user has reviewed an unlikely range of products or services);
- whether businesses are manipulating the presentation of reviews about their products and services (for example, by combining positive reviews for one product with the reviews for another); and
- whether reviews are the result of paid collaboration.
The CMA is not currently alleging that any website has acted illegally, but instead has confirmed that its intention is to ensure that the sites have robust systems in place to find and remove fake reviews or reviews that mislead people about a product or business.
This investigation is not the first time that the CMA has shown an interest in this area, with its past investigations also focusing on fake reviews, failure to publish negative reviews, and undisclosed paid-for endorsements.
It is clear that the CMA intends to take a hard-line approach on any non-compliance. A statement from Andrea Coscello, chief executive of the CMA, confirms that it will not hesitate to take further action if they find evidence that the websites under investigation are not doing what is required under the law. The regulator has confirmed that it will take enforcement action to secure any necessary changes and pursue action through the courts if needed.
Online reviews continue to be an important area of focus both in the UK, as well as across Europe. We will see further changes in this space in light of the new EU Omnibus Directive, which must be fully implemented in Member States by 28 May 2022. Among other things, the Omnibus Directive imposes an obligation on traders to justify the reasonable and proportionate steps they have taken to ensure that the reviews on their site are genuine. While the UK will not be obliged to implement the Omnibus Directive (assuming it will no longer be a Member State by 28 November 2021), it is clear that online reviews will continue to remain under scrutiny both in the UK and the EU for some time to come.
Why this matters:
The CMA is keen to ensure that the increased dependence of consumers on online shopping is not exploited by misleading online reviews. The CMA’s launch of this investigation is yet another reminder to businesses that regulators across a broad spectrum of consumer law are currently prioritising the need to prevent consumer exploitation due to the impact of Covid-19.
The extent of CMA’s previous work in this area combined with current concerns over preventing consumer exploitation during lockdown suggests that it will take a tough approach against any non-compliance found in this area.
Businesses should therefore ensure that they remain compliant throughout this period and beyond, not least due to potential reputational issues which could be caused by allegations of fake reviews and misleading advertising.
