The Competition and Markets Authority (CMA) now has direct enforcement powers in consumer protection law under the Digital Markets Competition and Consumers Act (DMCC Act). In the first part of our series of consumer deep dives, we explored the new rules on unfair commercial practices. In this second part, we focus on fake reviews, including closer look at the relevant tests, risk areas and compliance tips for businesses.
Fake reviews are now a banned practice (i.e. always unfair)
Tackling fake reviews has long been on the government’s radar – our previous blog considered guidance on hidden advertisements published in the wake of the CMA’s social media endorsements investigation and more recently the CMA has investigated Google and Amazon’s online review practices.
Whilst the CMA has long had the power to take action against fake reviews using general consumer protection rules, the DMCC Act makes them a banned practice under Schedule 20 for the first time. In effect, this means that fake reviews will always be considered unfair and are not subject to the transactional decision test described in our previous blog. Specifically, it is now a banned practice to:
- Submit or commission another person to write or submit (i) a fake consumer review, or (ii) a consumer review which conceals the fact that it has been incentivised.
- Publish consumer reviews, or consumer review information in a misleading way.
- Publish consumer reviews, or consumer review information, without taking such reasonable and proportionate steps as are necessary to prevent the publication of fake or misleading reviews and remove such reviews from publication.
- Offer services to traders to do or facilitate any of the above.
The scope of these rules is potentially very broad, particularly the “facilitation” offence. So, what do the new rules mean in practice and how can businesses comply? The rest of this post will provide the answer!
What’s in scope of the new rules?
The new rules apply to both:
- Consumer reviews – reviews of a product, trader or any other matter relevant to a transactional decision. This can be in the form of text, speech or graphic representations; and
- Consumer review information – information that is derived from, or is influenced by, consumer reviews (this could be as simple as using icons like stars to cross-reference reviews hosted on a third-party site).
What are banned reviews?
When it comes to infringements, there are three core pitfalls to be aware of:
- Fake reviews – consumer reviews that purport to be, but are not, based on a person’s genuine experience (positive or negative!).
- Concealed incentivised reviews – otherwise known as “hidden advertisements”, these reviews conceal the fact that they have been incentivised (for example, the reviewer may have been paid to post a review, received a “gifted” product/stay which they are expected to review, or may themselves have an interest in the company or product which they are reviewing).
- False or misleading consumer review information – when customer review information is published in a misleading way and is false or misleading, it falls in scope of the banned practice.
What does it mean to submit a fake review?
This offence includes: (i) providing a review to a trader and (ii) a reviewer publishing the fake review themselves, meaning that not only businesses, but also individuals (e.g. influencers) are within the scope of the CMA’s new powers.
What is considered publication “in a misleading way”?
The CMA’s final guidance provides welcome detail as to how the CMA will assess compliance and highlights the following, non-exhaustive, examples of when businesses will be considered to publish consumer reviews in a misleading way:
- Supressing and cherry-picking (positive or negative) reviews: Importantly, businesses should not interfere with the ability and willingness of reviewers to leave negative reviews or remove the impact of negative reviews by virtue of the way information is edited and presented. Whilst testimonials showing positive reviews may be published on websites, it is important that such examples reflect the experience being reported by reviewers overall.
- Omitting information relevant to how reviews have been written: This is particularly important to ensure that incentivised reviews are clearly marked.
- Catalogue abuse (e.g. review hijacking or review merging): Compliance gets more complicated when businesses bundle together reviews which relate to different products. The CMA makes clear this could be permissible in some cases, but will be considered non-compliant where reviews are merged to “boost” one product’s rating or review count by leveraging off another, materially different, product. What does “material difference” mean in this context? As one example, CMA Guidance indicates that differences in quality will be considered material in this context.
- Outdated genuine reviews: If a product has changed over time, businesses will need to consider whether continuing to publish genuine reviews that were provided before the changes could be misleading. The test will be whether the change has any material impact on the consumer’s experience – a “material impact” is undefined in the CMA guidance, and is likely to be determined on a case-by-case basis.
What does it mean to ‘facilitate’ the commissioning or publication of banned practices?
The wording of the DMCC Act itself was particularly broad concerning the facilitation offence (as was the draft guidance). The CMA’s final guidance clarifies that “facilitation” would include, for example, a third party offering services that “increase the chance of a fake review being successfully posted on a platform or website by virtue of their expertise in bypassing the platform of website’s security measures” (for example, offering services to traders enabling accounts to be set up in a way that avoids or reduces detection).
The CMA’s final guidance also clarifies the risk for online platforms and social media sites, which could be considered non-compliant where they are aware of, and continue to allow, traders to sell services which arrange for fake reviews and concealed advertisements to be posted on third party sites.
A new proactive obligation on businesses to monitor for, and remove fake reviews
The DMCC Act introduces a positive obligation on businesses who publish consumer reviews or consumer review information to take proportionate steps, as are necessary to proactively tackle banned reviews. All businesses should (i) introduce a prevention and removal policy for fake reviews and (ii) develop and apply “reasonable and proportionate steps as are necessary to address the issues identified”.
Reasonable and proportionate actions include:
- Taking proactive steps to detect fake reviews;
- Investigating suspicious reviews which businesses have identified or been notified of;
- Taking pro-active steps to prevent customers from being misled by banned reviews; and
- Regularly assessing the effectiveness of the prevention and removal process.
This is a significant change for businesses to comply with, and one of the reasons that the CMA has allowed businesses a three-month grace period in which to ensure compliance before enforcement of the new rules on fake reviews are enforced.
The CMA’s guidance acknowledges that the steps which will be considered “reasonable and proportionate, necessary” differ for first-party publishers (e.g. review platforms) and second-party publishers who reference reviews which are themselves hosted on a third-party website.
Undertakings from both Google and Meta over recent years demonstrate significant proactive action to prevent, detect and remove banned reviews. Second-party publishers, by contrast, may determine that a “reasonable and proportionate” first step would be to review the compliance policies and monitoring/removal procedures of the first-party publisher sites which they reference and evaluate whether they can have reasonable confidence in these procedures, before determining whether further proactive steps are required on the part of the second-party publisher to ensure compliance.
Tips for businesses seeking to comply
As mentioned above, the CMA will not enforce against fake reviews until July 2025 at the earliest, allowing businesses time to comply – our top compliance tips are included below to support businesses as they familiarise themselves with the new rules.
- Allow your customers to publish genuine reviews freely. Don’t make it difficult for customers to post negative reviews (or make negative reviews difficult to see), nor selectively promote positive reviews for general viewing.
- Consider how, and what, information is displayed, when publishing reviews. Omitting, obscuring or highlighting important information may be considered misleading.
- If you are publishing incentivised reviews, clearly identify them as being incentivised (i.e. a prominent label denoting the review as an advert).
- Consider how your consumer review information is being determined – if it is influenced by incentivised reviews, consider how this might change how information should be presented to consumers.
- Ensure you have a policy on fake reviews to ensure compliance.
- If you are publishing testimonials, ensure that these are a fair reflection of the overall experience being reported by reviewers.
- Consider what a regulator would determine are “proportionate and necessary” steps for your business to proactively prevent the dissemination of fake reviews.