The CMA has found that online reviews and endorsements are proving useful to consumers, but it has concerns that some practices may be unlawful.
The Competition and Markets Authority (CMA) opened a call for information on online reviews and endorsements in February this year. In a report published today it estimates that more than half of UK adults (54%) use online reviews, and that 6% use 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.
However, the CMA has also heard about instances of potentially misleading practices:
- 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
In response, the CMA has opened an investigation using its consumer enforcement powers into a number of companies in connection with the potential non-disclosure of paid endorsements. Other concerns that have been raised with the CMA are being assessed to determine whether enforcement action is warranted.
The CMA has also produced information for businesses explaining what they need to do to help them comply with the law, alongside a comprehensive report on its findings.
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.”
BHA will continue to work to promote reliable, transparent practices
Jackie Grech, Legal and Policy Director for the British Hospitality Association commented: “Online user reviews have fundamentally changed the way people find, search and book restaurant and travel. They are powerful influencers for customers’ purchasing decisions, especially for hospitality purchases.
“Customers place increasing levels of trust in online user reviews, which makes them incredibly helpful when appropriately used but capable of really misleading consumers and harming business when misused or abused.
“We are pleased that the CMA has listened to the recommendations from our industry in their report and their recommendations going forward. We share a goal of ensuring our customers receive accurate, transparent and useful information about our businesses. We will continue to work closely with the online review platforms and government to promote practices that encourage reliable reviews and transparency in business rankings, ratings and search result order.”
For more information click here
For the CMA report click here