CMA to investigate review sites to see if they are misleading consumers
Ever used TripAdvisor to check a hotel or restaurant? Checked out your plumber on Checkatrade? Read a blog that reviewed the latest gizmo? All of the above are the subject of a new consultation by the Competition and Markets Authority on how information in online reviews and endorsements is used.
The CMA (which took over the things previously looked at by the Office of Fair Trading) is asking consumers, businesses and other interested parties to come forward with their views. In simple terms, the CMA, which is “committed to looking at evolving online markets”, has realised that “large numbers” of consumers read and rely upon online reviews when making purchasing decisions. These include sites like TripAdvisor and Checkatrade which do so formally, and blogs that have less formal reviews.
A lot of review sites have been accused of having misleading or downright fake reviews, with stories of hotels offering sweeteners to guests who offer good reviews on the site-as well as tales of customers trying to hold hoteliers over a barrel with the threat of a poor review. The CMA is “aware of a number of potential concerns about the trustworthiness or impartiality of information in some reviews and endorsements that is being provided to consumers” and wants to investigate if there is anything it ought to be doing something about. It is also mindful of the effect negative reviews can have on businesses, and that is why those affected by review sites are also being asked to comment.
To be honest, the CMA isn’t sure what exactly it will do if it finds Things To Be Concerned About, but possible action includes: launching a market study covering this sector, or a part of it; initiating consumer enforcement action; advocating legislative change to government; providing guidance to industry or consumers, or both; and /or seeking voluntary action from the industry. Or doing absolutely nothing.
Nisha Arora, CMA Senior Director, Consumer, said:
The information contained in online reviews and endorsements can be a powerful force in the hands of consumers. Informed consumers make better decisions, driving competition on price and quality. Businesses have always known that ‘word of mouth’ is one of the most important factors for potential customers; what online reviews and blogs do is to provide a greatly amplified version of this. However, for this sector to work well it is important that this information is genuine, relevant and trustworthy.”
More detail is available on the call for information page, and the deadline for responses to the call for information is 25 March 2015.