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Last year, consumer law was pushed to the very top of many businesses' compliance agenda and one area under regulatory scrutiny is use of online reviews.
This isn't new, the Competition and Markets Authority (CMA) has previously investigated and sought undertakings from some of the big online platforms. However, following the implementation of key parts of the Digital Markets Competition and Consumers Act (DMCCA), the CMA has been blessed with new powers, enabling it to tackle consumer law breaches more efficiently and to impose far heavier penalties.
Last summer, the CMA flexed its muscles in this space and carried out a large sweep of over 100 businesses looking at e.g. whether they had a published reviews policy in place and, subsequently, sent warning letters to businesses who had not published a policy on their websites.
If you attended our ADVice seminar in January, you may recall that we mentioned we thought that the CMA would continue to ramp up enforcement action in this space following their relatively gentle first steps and that businesses should pay heed to the warnings...
... and last week, the CMA launched five new consumer law investigations into suspected fake and misleading online reviews. The businesses under scrutiny span sectors from food delivery to funeral services. The message from the regulator is unmistakable: no industry is off-limits.
Are you affected?
If your business uses online reviews, whatever your product line, the CMA just made it very clear: it's watching, you are affected and this action should come as a warning.
And if you engage in any of these practices – which have triggered the CMA's investigations - then the risk of enforcement action will be high:
- Suppressing negative reviews and cherry-picking only positive reviews;
- Asking staff to write reviews;
- Boosting the ratings of certain products or services;
- Incentivising reviews but not disclosing the incentive.
What should you do?
Online reviews are an increasingly popular means of consumer research. Most of us, as consumers, will look at the star rating or the reviews of a product before we make a purchase.
All businesses that use reviews should:
- read the CMA's guidance;
- ensure you have a reviews policy in place;
- consider how reviews are collected, moderated and used in marketing materials (including if you only use reviews from third party platforms – you are not absolved of responsibility);
- think about what incentives are offered in return for reviews; are these incentives being disclosed?
- take a look at your customer journey and look closely at how reviews and review information is presented. Consider how likely it is that customers and consumers may encounter banned reviews or also misleading consumer review information;
- risk assess those journeys/assets and make changes where necessary; and
- seek expert advice on strategies or any concerns you may have. Dan Smith and Zoe Pearman would be happy to help!
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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