There is a right way of doing something and there is a wrong way. This applies in business as in life. All too often we are waiting for the law to catch up with those doing it the wrong, but technically legal, way. Whether it’s tax avoidance, black-hat SEO (search engine optimisation) practices or greenwashing, it will continue as long as loopholes remain open. However, there’s positive news for UK businesses as plans to close one unfair practice as The Competition and Markets Authority (CMA) announces it will be cracking down on fake reviews.
Why Online Reviews Are Important
The idea behind business reviews has always been that other potential consumers receive an honest and fair assessment of a former customer’s experience. Company and product reviews are not new, but have gone from customer quotes on product packaging, to potentially thousands of online reviews being made every day, in real-time.
This means that both good news and bad news spread fast. It also means the influence of our peers becomes even stronger and more accessible. The UK government estimates that the average UK household spends circa £900 every year as a result of being influenced by online reviews.
Online reviews are used in all sorts of businesses from retail to services. Most online shops have product reviews and they are common on restaurant websites too. However, it is the affiliates and comparison sites that host the reviews that see the highest traffic and most attention paid, including Airbnb, Tripadvisor, Amazon, Etsy and other big players.
Why Are Fake Reviews Harmful?
Online reviews are difficult to control. Arguably, a business should not be controlling what is said about it, especially in this social media world. But with online reviews coming in at such a rate and volume it’s almost impossible to check whether they are genuine or not. Whilst a company may be able to pick and choose only the best feedback for their own website, anyone can post a review on an online platform that you are listed on. These appear in any order and average out to award your company or product a customer satisfaction rating. This, in particular, is often instrumental in a consumer’s decision to support your brand, sign up for your service, go to your venue, make a booking or buy your products.
Therefore, fake reviews purposefully manipulate the public. Not only this, but they can affect attracting talent or investment to your business and your overall brand reputation.
There are, however, two sides to fake reviews:
Fake Good Reviews
False reviews of your business, by somebody who has not really experienced your products or services, may be posted by a company. Alternatively a company may be pay a PR company or other person(s) to post false ‘good’ reviews of their business. False good reviews aim to get a company’s overall rating up and win them business.
Some companies even hire online reputation management companies. These are responsible for building a positive brand prominence or even repairing a bad online reputation. Some, of course, do this through ethical means by promoting company values and creating content. However, there are some for whom generating fake positive reviews is a standard part of the package.
Fake Bad Reviews
Companies cannot expect to have all perfect reviews, however, they should all be genuine. Bad reviews may be posted about a company by their competition or a person with a vendetta. Historically, it has been difficult to prove these reviews are false or to have them removed. Leading some companies to attest that false reviews have done their business serious harm.
Fake reviews are damaging to the consumer and sometimes to businesses too. Moreover, it creates a false marketplace where the reputation of a company is self-created rather than organically cultivated. Companies that can afford to fund fake reviews are also taking advantage of their position in the marketplace, driving out smaller businesses with their size and influence.
Are Fake Reviews Illegal?
Competition regulator, the CMA, announced plans to bypass court proceedings so that they can directly impose financial penalties on those who break consumer law. This includes those who post or fund fake reviews. It may also be imposed on those who host fake reviews.
Websites through which purchases are made, such as Airbnb, Etsy and Amazon, do have some powers in place to check the authenticity of reviews. Some only allow a review to be posted if you log in, make a booking or purchase an item through their site. So, in some ways, the issue of fake reviews is being addressed by market disruptors, rather than regulation.
Under these new rules there could be considerable damages incurred for businesses who write, host or pay another entity to falsely generate false customer reviews online. Aside from the legal and financial penalties, it is reputation possibly that suffers the most. Once customers sense they have in any way been mistreated or misled, winning back trust is an upward battle that many companies don’t win.
Get legal advice with LegalDrop
If your business has been affected by fake reviews it’s best to seek expert legal advice. But this needn’t be difficult or expensive. LegalDrop makes it easy to find the right expert and get clarity on the cost – start your search here.