The UK competition watchdog is to probe businesses that may be paying for endorsements in blogs and other online articles where the payment may not be clear to readers.
The Competition and Markets Authority (CMA) found that website reviews and endorsements are proving useful to consumers, but it raised concerns that some practices may be unlawful.
It opened a call for information on online reviews and endorsements in February.
The CMA estimates in a report published today (Friday) that more than half of UK adults (54%) use online reviews, and that 6% view blogs or vlogs before making purchases.
Most buyers who used reviews and endorsements found that the product or service they bought matched up to their expectations.
But the CMA has also heard about instances of potentially misleading practices such as:
• fake reviews being posted onto review sites
• negative reviews not being published
• businesses paying for endorsements in blogs and other online articles without this being made clear to consumers
A CMA investigation has been opened using its consumer enforcement powers into a number of unnamed companies in connection with the potential non-disclosure of paid endorsements.
Other unspecified concerns that have been raised with the CMA are being assessed to determine whether enforcement action is required.
Nisha Arora, CMA senior director, consumer, said: “Millions of people look at online reviews and endorsements before making decisions such as where to stay on holiday, or which plumber to use.
“We have found that consumers who use online reviews and endorsements find them valuable, but we have also heard about some practices that may be unlawful.
“We are committed to ensuring that consumers’ trust in these important information tools is maintained, and will take enforcement action where necessary to tackle unlawful practices.
“We have opened an investigation into businesses that may be paying for endorsements in blogs and other online articles where the payment may not have been made clear to readers.
“We have also published information for businesses to tell them what they need to do to help them stay within the law.”
Andrew Mabbutt, chief executive of review platform Feefo, said: “We very much support the CMA probe into the UK reviews and ratings market.
“Feefo played a part in contributing to the CMA report, as we have constantly championed for review platforms to be more accountable.
“As millions of consumers refer to reviews and ratings prior to making a purchase, it is absolutely crucial that they can be trusted and are genuine”
He added: “We have known about questionable tactics and practices from a large number of review platforms going on, but it has been difficult to fight that alone.
“We cannot welcome this report strongly enough and hope it’s the start of an auditing process that will ultimately lead to the accountability of those platforms that allow anyone to post a review, (or indeed allow “pay for a review” activity to be posted) without true verification.
“This practice cannot go on and the review platform has to be as guilty as the fraudulent writer of the review.”
“Not only is it unlawful for companies to post fake reviews, it is also detrimental to the consumers experience and their subsequent purchasing decision making.
“Consumers need to be able to trust the reviews they see are written by a genuine purchaser and can be matched to a genuine order or booking or transaction.
“Consumers and businesses should treat with scepticism review sites where anyone can post a review regardless of whether they have purchased or not.”
Feefo is pushing to go further than just the CMA recommendations, and have been appointed onto the ISO (International Standards Organisation) Committee for Online Reviews, to help establish the first global set of standards and accreditations for in the Online Review space.
A spokesman for online travel reviews giant TripAdvisor said: “We welcome the CMA’s report and its recommendations which are in line with our own policies to protect the integrity of our online reviews. Indeed the types of recommendations called out by the CMA have been in place at TripAdvisor for years.
“As a leader in the online review space, we’re proud to be driving best practices in the sector and we welcome measures to eliminate bad practices in the wider online review industry, which will help to protect consumers and businesses alike.
“Nothing is more important to us than ensuring travellers gain an accurate and useful picture of the businesses and destinations they research on TripAdvisor.
“If people didn’t find our content useful and reliable, they wouldn’t keep coming back to our site.
“We agree with the CMA’s recommendation that all review sites should have appropriate fraud detection measures in place.
“TripAdvisor has been developing and refining its fraud detection process for more than 15 years, we fight fraud aggressively and our systems and processes are extremely effective in protecting consumers from the small minority of people who try to cheat our system.
“We have sophisticated systems and teams in place to detect fraudsters, and we have strong penalties in place to deter them.
“We are pleased that the CMA has recognised that online reviews are a hugely valuable, reliable and useful resource, but that bad practices in the wider industry need to be tackled to ensure that consumers are able to get the most accurate information possible.”