Policing the new fake and misleading consumer reviews banned practice set out in the Digital Market, Competition and Consumers Act 2024 is high up the Competition and Market Authority's agenda. This, coupled with the threat of facing the CMA's new direct enforcement powers for non-compliance, including substantial fines, makes it wise to keep track of CMA updates in this area. Following revised guidance is also likely to help businesses stay on the right side of the CAP or BCAP codes too.
As well as issuing detailed guidance about fake reviews, the CMA has now also updated its short form guidance for content creators and influencers, as well as for brands and agencies that use them, and its six principles for platforms. It has issued guidance for online review websites as well.
The key message to all is that it's essential to identify paid endorsements. Below we set out the takeaways for: content creators, media companies, brands and platforms.
Content creators
The guidance points out that if a content creator accepts payment or has any other incentive to endorse something, they need to make sure that the content is clearly identifiable as being incentivised. For example, they could label posts or videos as 'advertisement feature' or 'advertisement promotion'. Payment includes any form of incentive or reward such as money, commissions, discounts, leases or loans free of charge or in more favourable terms than those offered to the general public, and gifts of any products. Having an incentive includes where you are posting on behalf of your own business, or the business of a friend or relative (and the ASA has issued a couple of rulings on this, eg here).
Media companies and agencies
Media companies who arrange for content to be published for businesses also risk breaking the law if it is not clear when content is incentivised.
They should always make sure that such content is clearly identifiable. For example, they should:
- provide clear instructions to the person publishing the content, and anyone else involved, on how incentivised content should be identified; and
- ensure that the marketing agency's staff training materials, internal policies, corporate brochures, contracts and related material accurately reflect the requirements of the law.
Brands
Brands should make sure that their contracts with content creators, whether this is a formal or informal arrangement, work with them to ensure they understand their legal obligations to disclose upfront and clearly that any content they post for a brand is an ad. This should include compliance with the CMA-ASA joint guidance.
The CMA also says that if you send out free gifts to content creators, make sure that you include clear instructions that any content posted as a result must be labelled as an 'Ad'. This applies even if you don't ask for anything in return.
Business should also have a policy setting out the brand rules on conduct that content creators should follow and should make sure they and any intermediaries are aware of this. They should check that content that refers to their brand or business to ensure it is properly identified as advertising. Where content is published on a business's behalf, it may be held responsible if it is misleading or otherwise non-compliant.
Platforms
As well as content creators, brands and agencies, the CMA also updated its six principles for platforms. In June, Amazon gave the CMA undertakings about reviews and, although these were agreed under the old law, they provide insights into CMA's likely expectations of how such principles should be applied.
The six principles are:
- Inform users that incentivised endorsements are required to be clearly identified as advertising and clearly distinguishable from other content, and that fake reviews are not allowed.
- Provide content creators with tools so they are easily and effectively able to label any content as advertising.
- Take appropriate, proportionate, proactive steps and use available technology to prevent hidden advertising and fake reviews from appearing on your site.
- Make it simple for users to report suspected hidden advertising and fake reviews easily and effectively.
- Facilitate legal compliance by brands.
- Enforce your terms and conditions and take appropriate action when violations occur.
In addition, the CMA has issued guidance specifically for online review websites. In particular, it says that aggregate ratings must reflect all genuine reviews and must not be distorted by fake or incentivised reviews. They also need procedures to remove fake reviews. The CMA also reminds websites not to allow businesses to remove reviews they don't like. They also need to clearly and prominently disclose any commercial relationships they have with the businesses listed.
Given the CMA has carried out a sweep of websites to make sure that they are complying with the new laws about fake reviews, there's no time like the present to review your business' practices in this area. For more information about how to avoid falling foul of the new rules on fake reviews, visit our Consumer Law Hub or feel free to contact one of the team below.,
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.
