The Government is proposing a package of reforms to ensure the UK has a ‘best in class’ competition regime. This includes hefty penalties which would make it automatically illegal to pay someone to write, or host, fake reviews.
“The UK’s economic recovery relies on the strength of our open markets and consumers’ faith in them.
By delivering on our commitment to bolster our competition regime, we’re giving businesses confidence that they’re competing on fair terms, and the public confidence they’re getting a good deal.”
– Kwasi Kwarteng, Business Secretary
The new reforms would allow the CMA to:
- Impose stronger penalties for companies that don’t comply with its investigations or orders, with new powers for fixed penalties of up to 5% of annual turnover and additional daily penalties up to 5% of daily turnover while non-compliance continues
- Disqualify company directors who make false declarations to the regulator
- Accept voluntary binding commitments from businesses at any stage in its investigations, rather than having to wait till the end – leading to quicker outcomes and reduced costs for both businesses and the regulator
- Block a wider range of harmful mergers, including so-called ‘killer acquisitions’ where big businesses snap up prospective rivals before they can launch new services or products
This is a serious deterrent – 5% of global turnover as a fine and an additional daily 5% of turnover for every day a fake review remains on a website would be a maximum rather than a default but the threat of fines at this level will certainly make website owners and marketplaces pay attention.
What are fake reviews?
There is of course a question as to how we defines fake reviews. Certainly we can all agree that if a consumer purchases a product and of their own free will (or prompted by a request from the platform) leaves a review that can be good, bad or indifferent that this would be legitimate.
At the other end of the scale, what about a review where a business sends a product to a social influencer who writes a review? Well so long as it’s disclosed that it was a free product not too many people would have a problem with that either.
But in the middle there is the dirty world of discounts, incentives and straight payments or free product for which the only purpose is to garner a review, with the expectation that this review would be positive. This is the area the CMA want the powers to crack down on.
And don’t forget, it’s not just the leaving of fake reviews which could be questionable, there are many businesses who fight every genuine review if it’s not positive and will beg, cajole and indeed pay or offer a refund if you’ll edit your damning review to one slightly less detrimental to their businesses. This will perhaps be the area most difficult to monitor as there’s a difference between a company that genuinely puts things right to one that simply pays to remove anything that’s less than complimentary.
“These proposals are long overdue, but a huge step in the right direction. Fake reviews have been around for years, with consumers being misled and defrauded. 96% of people rely on user reviews before purchasing, and the increase in online habits has further fuelled this. Despite life gradually returning to normal, these purchasing behaviours aren’t going to change any time soon.
The move to allow the CMA to act quickly and hold the companies who allow fake reviews on their sites to account should spur a real change. The potential fine size is eye watering so I hope this would drive some companies to take better action against fake reviews.
We know the CMA won’t have these powers overnight, but there is action that companies can take, right now, to cut out fake reviews. The only way to guarantee real and accurate reviews is to ensure they are posted by real customers. That means robust verification processes to confirm somebody is genuinely a buyer before they can leave a review. For example, invite only review platforms take steps to limit fake reviews, so businesses and their customers can trust every piece of feedback comes from someone who has actually used the product or services.”
– Tony Wheble, CEO, Feefo