Monday 17 June 2024

Online reviews and legal compliance - an important insight

It may come as a surprise to some readers that this investigation remains open and ongoing

We were recently lucky enough to have a detailed conversation with a senior staffer at the Competitions and Markets Authority; we say 'lucky' because the CMA doesn't usually take inbound calls unless they emanate from HM Treasury or the Department for Business and Trade. 

What follows is an analysis of the current situation as regards the regulation of online reviews, and the enforcement of that regulation. First: points that emerged from that conversation:

  1. Once opened, a CMA investigation remains open until formally concluded.
  2. The fact that the CMA remains silent on an investigation for a period - months or even years - does not mean that the CMA's investigation is dormant.
  3. The CMA has no duty whatsoever to warn or alert those under investigation.
  4. All of the CMA's investigations - and the findings thereof - have the full force of the UK law.
So, combining those four points with the information and knowledge we have gathered over the years, what a) do we think businesses ought to be doing in relation to review gathering and display? and b) what action do we think the CMA will take at some future date?

Let us take that last point first: the CMA currently has an open investigation into the abuse of online reviews. This is a matter of public record and it focuses on two of the CMA's core rules...
  • the explicit ban on cherry-picking: choosing pre-identified 'happy' customers before inviting a review - anywhere (own website, review site or Google)
  • the explicit ban on gating - using any mechanism to pre-qualify a customer's opinion. Commonly used mechanisms include email questionnaires and in-app ratings

What should businesses be doing? 

Here's the advice we give - as standard - to every business we meet for the first time.

1.  Comply. To the letter. Don't cherry-pick*. Don't gate*.

Reasoning: when the CMA do act they will do so without warning. One day a business will look great, with hundreds or even thousands of great reviews on Google or Trustpilot and the great scores that accompany them; the next day their hard drives will be at 25 Cabot Square in Canary Wharf being pored over by forensic tech specialists.

If you doubt the CMA's willingness to take such action please read about the estate agents that were fined for price-fixing, a situation once endemic (we heard the squeals: 'Everyone does it') but which stopped overnight. The same will, one day, happen with online reviews - after all, any action which bends the rules to benefit the business and thefore misleads the consumer is manna from heaven for the CMA. The only thing we cannot predict is exactly when or where the CMA will strike. It could be tomorrow, or it could be in ten years' time. 

Now, before you - quite reasonably - say 'But we will open the floodgates to inaccurate, misleading and/or just plain unfair reviews, which will be of no help whatsoever to us as a business or our potential customers' read on...

*Cherry-picking: selecting proven 'happy' customers to invite to write a review. Gating: using a mechanism to pre-determine those customers most likely to write a positive review, commonly performed by sending out a questionnaire.


2.  Adopt a moderated system of review management.  

A score of 4.0 out of 5 is fine if a business is in online retail, but the professions and service businesses need to score as close to 4.9 as is humanly possible, because their potential clients/patients are so much more sensitive to negative reviews. They are also far more likely to actually read the business's negative reviews, rather than being simply guided by its headline score.

That doesn't only mean doing a great job for your clients/patients but adapting to address the constant drip of misconceptions and factual inaccuracies contained in a significant minority of reviews (we often meet businesses that say 'We're really good at what we do' and we believe them, but then we ask them 'Do you trust all your clients/patients to write an accurate and thruthful review?' The penny then drops.

Moderation is the process of checking reviews for factual accuracy. We have calculated that our moderators need to involve themselves in about 7 per cent of reviews for the average client (that excludes correcting spelling and grammar, which is done as a matter of course). Most important of all, successful moderation (and over 97 per cent of all interventions are successful) results in a higher overall score (an average of 4.8 as opposed to 4.5) as a direct result of far fewer inaccurate, misleading or unfair reviews being published.

And what will the CMA do (to those flouting the rules)?

They will descend on a business or a selection of businesses, possibly prompted by a whistleblower, without warning (think 'VAT inspection'). They will use their statutory powers to confiscate evidence in support of a case that will already have been built up over a period of time.

They will then issue a fine - these can be substantial, six or seven figures, and further sanctions against individual directors if these are warranted (for an example see the link embedded in the paragraph under '1. Comply' above).

Admittedly, the chance of the first investigation landing at the door of any single business is small, but when it does happen there will be no shortage of disgruntled ex-employees and past customers queueing up to tell the CMA of their experience with similar businesses. And, as we have said so often in articles like these, why not comply when the benefits are so great anyway? Especially when viewed relative relative to the cost (see below).

Meanwhile - businesses should not relax

Two businesses: one fully compliant, one, from the CMA's legal point of view, guilty of breaching its core regulations. The non-compliant business can become fully compliant overnight.

Supposing a business is either gating and/or cherry-picking (and we see such businesses every day) what are the consequences? They are twofold...

  1. Every day a business continues to be in breach of one or more of the CMA's regulations regarding reviews is another day of evidence piling up in email in/outboxes and on hard drives (not to mention on Google). Our view is that a business that becomes compliant having been in historical breach is far less likely to attract the attention of the regulatory authorities than one that continues to be in breach.
  2. The fact that a business is in breach is seldom lost on members of staff or competitors (bearing in mind that current members of staff can become 'ex-members of staff' and take positions with competitors). We have seen multiple examples where the fact of a business being in breach has been used in a competitive pitch, along the lines of 'Yes, but they only look as good as they do because they are breaking the law.'


This article focuses on the CMA and sanctions for illegal manipulation of online reviews. However, there are so many positive benefits for a business that adopts professional review management. Whilst being able to sleep at night in the sure knowledge that the CMA will not come knocking at 9.05 am is an undoubted plus, the day-to-day knowledge that factually inaccurate and potentially misleading reviews are being managed pre-publication, on either the business's website and/or on Google and the consequent benefits of a higher score and fewer unfairly off-putting reviews.

Further reading

We see compliance as step one. Then we come to the positive aspects of membership...

  • Results - more clicks, more calls, resulting in more - and higher quality - business
  • Moderation - what every professional and service business needs to safely interact with online reviews
And the cost?

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