CMA’s research

In June 2015, the Competition and Markets Authority published the results of its consultation on online reviews and endorsements along with guidance to businesses about how to comply with overarching consumer protection laws when engaging in such activity. For businesses the consultation highlights the importance of having a policy in place to ensure that consumer reviews and endorsements are moderated in order to avoid falling foul of consumer protection laws.

Consumer Protection Regulations

The Consumer Protection from Unfair Trading Regulations 2008 (the Regulations) contains a list of 31 commercial practices which are banned outright in all circumstances (Schedule 1). One of these is relevant to online product reviews: “using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).” (Schedule 1(11))

In addition, the Regulations prohibit any commercial practice which is misleading. A misleading practice may either contain false information about a product, or even if the information is correct, its overall presentation is likely to deceive the average consumer about some features of the product, and is likely to cause a consumer to buy a product he wouldn’t otherwise have bought (Reg 5).

Online reviews – what are the risks

Online reviews present a number of risks in relation to the consumer protection law outlined above. Some businesses may present what is essentially an advertisement for their protect in the guise of a review from a satisfied customer, without making clear that the content is an advert or has been paid for, whether through a commercial relationship with another business or by offering customers an incentive to write positive reviews. This is a prohibited practice. Some businesses may even pretend to be a customer and write their own positive reviews, which is a misleading practice.

Even where a business is not quite so brazen, there are other risk areas to consider. Deleting or editing negative reviews, or delaying publication of reviews could also constitute misleading practices.

If a business is found to have breached its obligations under the Regulations, it may face a criminal charge and a fine, which is no longer subject to a statutory maximum under new Magistrates’ Court rules. An individual trader could also face imprisonment.

What should businesses do

If your website allows the publication of reviews, either of your own products or of someone else’s, there are a number of actions to consider

You should be clear about where reviews come from and how they are checked before publishing. All reviews, even negative ones, must be published if they are lawful. If reviews are to be edited, or held back from publication entirely, in case of abusive language or defamatory remarks, these circumstances should be clearly explained to consumers. Any advertising or paid-for content should be clearly marked as such, and any commercial relationships with other businesses should be made clear, including how this may affect review ratings. There should be procedures for identifying and removing fake reviews, for example those written by other businesses about their own products.

If your business has products that can be reviewed on your own or another’s website, there are further considerations. You should not offer inducements to a consumer to write positive reviews about your business or product; you should not pretend to be a customer and review yourself; and if you work with a third party to manage your reviews, you should ensure they also follow your policy and are aware of their obligations under consumer protection law.

Moderation policies

One way to help compliance with the regulations is to have a moderation policy in place, which can be used by staff to ensure reviews are not utilised in a misleading way. Please contact Bond Dickinson if you would like any further advice on putting together a moderation policy, or if you have any other questions about your obligations under consumer protection law.