The Competition and Markets Authority (“CMA”) has brought enforcement action against Total SEO & Marketing (“Total SEO”) for writing over 800 fake online positive reviews for 86 small businesses published over 26 different websites, promoting products and services such as mechanics, car dealers and landscape gardeners. In order to avoid criminal sanctions, Total SEO has provided undertakings that they will stop writing fake reviews and to remove the existing reviews.
Posting fake reviews is a breach of the Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) which apply to all traders (effectively all businesses) in their dealings with consumers. The CPRs prohibit unfair commercial practices, including misleading actions or omissions, which cause or are likely to cause the average consumer to take a transactional decision he would not have taken otherwise. In addition, for a trader to falsely represent itself as a consumer is an automatically unfair practice under schedule 1 of the CPRs, even if there is no change to a consumer's transactional decision.
Over the last few years there has been some limited enforcement of fair trading online. For example in 2010, in the first investigation of this kind, the Office of Fair Trading (then responsible for enforcing the CPRs) found Handpicked Media to be in breach of the CPRs by not making it clear that blogs and tweets were sponsored. In 2012 the Advertising Standards Authority upheld a complaint against TripAdvisor in part due to the company’s inability to prove that reviews on the tripadvisor.co.uk website were authentic.
The CMA’s own statistics suggest that over half of adults use online reviews and one in 20 consider blogs/vlogs when making purchasing decisions. Presenting multiple positive reviews is clearly a powerful way to promote goods and services. Compared to traditional advertising it is simple and cheap and therefore available to small companies who may not be as well informed about what is or is not legal.
Therefore, recently the CMA has become more concerned with enforcing standards online. The Total SEO enforcement follows quickly from calls for evidence into issues such as non-posting of negative reviews and lack of clarity regarding sponsored blogs. The CMA say they are committed to maintaining consumer trust in online reviews and will take enforcement action where necessary.
Any business that depends on online reviews should be aware that there are potentially serious consequences if businesses attempt to manipulate reviews.
A trader can still be liable under the CPRs even if a fake review is written on their behalf by a third party such as a marketing agency.
Enforcement could take the form of an enforcement order under the Enterprise Act. This could force a trader to provide collective or individual redress for affected consumers. In serious cases there could be criminal sanctions against the trader including fines and up to two years in prison.
Potentially a trader could also be sued by customers for damages if they entered into a contract as a result of “misleading actions” by the trader. This could include an online review which is false or misleading. The customer could be awarded damages for both actual loss and alarm, distress, inconvenience or discomfort.
Businesses would be well advised to adopt the following policies regarding online reviews:
- Not write reviews on their own products/services or those of competitors, and to ensure that their employees do not do so without declaring their interest
- Not employ third parties such as agencies to write reviews on their behalf
- Take care when offering incentives to customers to write reviews, or offering free samples to bloggers - these must not be incentives to write positive reviews
- Ensure any arrangement between the business and bloggers is explicit and prominent in the blog and made clear prior to consumer engagement
- When selecting comments to appear in marketing material ensure they are not described as reviews