Trustpilot in the regulatory crosshairs

The AGCM - the Italian equivalent of the UK's Competition & Markets Authority - has fined Trustpilot EU 4 million as '[the] Online review platform provided consumer rating information not always representative of customers’ actual experiences.'

The ACGM's press statement is here. An extremely thorough English translation of the detailed findings of the Italian investigation is to be found here. 

In this post, we have taken extracts from both of these and made our own comments where necessary. 

The above is a summary press statement by the AGCM.

What follows is a translation and summary of the key findings by a European law firm.

Our comment

Overall

We continue to ask the question of any business subscribing to Trustpilot - or any other online review website - 'Why?'

• 'Why pay [a review site] when Google reviews are free?'

• 'Why pay [a review site] when Google reviews have far higher visibility?'

• 'Why pay [a review site] when Google reviews have greater credibility?'

We contend, as we always have, that if Google reviews had predated the online review sites, the latter would never have come into existence. 

Not covered by the above

Trustpilot's use of a 'Bayesian average' to calculate a business's 'Trustscore'. Here is what Google Gemini has to say on the topic...

The issue here can be broken down into 'Simple' and 'More complex':

Simple

Work this out if you can. We spent hours wondering how a business with 77 per cent of its reviews scoring it four or five stars could possibly result in a 'Trustscore' of 1.6, and couldn't come close to finding an answer

Most - all? - consumers will expect a score to be a mathematical average (as is the case with Google reviews and just about every other mechanism we have ever come across, including our own): the business has ten reviews scoring 5.0 = an overall score of 5.0. Not with Trustpilot, partly because of the seeding referred to above. All businesses start with a score of 3.5. The kind of score that will have most consumers moving swiftly on (to the next business). 

More complex

Click to read. Does anyone else think this sounds like 'Join and look great'?

Add to the above the fact that Trustpilot also applies a (positive) weighting to more recent reviews, and the water is muddied even further. This obviously benefits larger businesses and those that actively invite reviews from customers, which may just mean 'paying business members' (the ACGM evidently thinks so).

Overall

Some might say that all of the above work in favour of paying subscribers and against businesses that haven't joined Trustpilot. Certainly, Grizzly Research's examples, comparing similar businesses, some members and some not, give the distinct impression that 'join Trustpilot and look great, don't join and look terrible.'

The key here is two 't' words: 'Trust' and 'Transparency'. Reviews are relied on by the overwhelming majority of consumers these days to guide them toward reliable businesses. If businesses are offered an opportunity to tip the scales in their favour and that results in consumers being misled into using a business they might not otherwise use, it erodes trust. 

Tell us that a review such as this is not gold-dust? For all concerned: the business and those researching the business

We often hear people saying 'I don't trust reviews' or 'I wouldn't use reviews', and that is probably acceptable in the context of online shopping, but when it comes to choosing a medical, financial or legal adviser, it would be a great pity if the vital resource that online reviews can be was unable to be trusted.

 

How will the CMA identify businesses in breach of the law regarding reviews?

The Competition and Markets Authority (CMA) has begun action, initially against five businesses (including the review site Feefo) for alleged breaches of its regulations relating to reviews. A question that crops up not infrequently is 'How would a business be caught?' or words to that effect.

Here is the answer.

First, let's look at the CMA. Here are the relevant staffing levels (out of a total of just over 1,000):

Key Departments: The staff are distributed across units such as Competition Enforcement (131), Consumer Protection and Markets (118), and the Digital Markets Unit (70).

Specialists: The CMA employs about 120 economists, econometricians, and statisticians, alongside a 40-person data and technology team

These staff are all concerned, to one extent or another, in ensuring that businesses do not manipulate online reviews to the detriment of consumers.

What tools did they have at their disposal before 2024? They mainly relied on in-house manual investigations, sometimes, but by no means always, prompted by whistleblowers.

Who were those whistleblowers? The answer will surprise no one: they primarily consisted of ex-members of staff from non-compliant businesses or competitors of the same.

After 2024? There has been a seismic shift, driven by two factors:

• The introduction of the Digital Markets, Competition and Consumers Act 2024, which has given the CMA greatly increased powers to investigate and sanction businesses guilty of misusing online reviews

• The development of sophisticated specialist AI tools, designed specifically to identify those businesses in breach of CMA regulations

The above include:

• The power to enter a business or domestic premises with or without a warrant (section 75 (2)). This includes the power to access computer equipment, including passwords, and to interview staff.
• The power to impose fines of up to 10% of the business's global turnover where breaches are proven

Here is a uselful Gemini AI summary:

You can see and follow the links by conducting the same search: 'Digital Markets, Competition and Consumers Act 2024 powers to fine businesses'

In this context, it is significant to note that the UK CMA is not the only regulatory body interested in sanctioning businesses or review sites that it considers are not acting wholly or primarily in the interests of consumers. The Italian government, in the person of their version of the CMA, the AGCM, recently fined the review site Trustpilot EUR 4 million for breaches of its similar code.

So let us put this plainly: if the CMA identifies prima facie breaches of its regulations relating to reviews, it will visit business or residential premises without prior announcement and require access to all means of communication and data storage, including emails, texts/SMS and computer hard drives, as well as any keys or passwords. 

This will include:

• Seeking evidence that customers were selectively invited to write reviews, to whatever destination

• Seeking evidence that customers were pre-qualified - using an email or a questionnaire, for instance - before being invited to write a review

• Seeking evidence that members of staff or their friends/and or relations were invited to write a review

Secondary indicators will be:

• Unusual review patterns, such as many reviews one month and none the next
• Similar wording in multiple reviews
• Unusual geographical spread (Google show the home location of the reviewer, so a review of a dentist on a different continent might ring alarm bells)
• Repeated use of employee names in reviews
• Repeated reviews of incidental contacts (phone calls not relating to the core product or service, for instance); not of itself a breach, but indicative of a non-compliant management mindset

Upon finding evidence of breaches (cherry-picking and/or gating in the main - both of which leave a very visible and obvious paper trail) the CMA now has statutory powers to directly levy significant fines and director censure, now, unlike up until 2025, without recourse to the courts. 

Action any business currently in breach must take

Cease any illegal activity immediately. Put in place a strategy for 'cleaning house'. This will involve:

1. Having a CMA complaint mechanism that allows all of your customers to write a review at a time of their own choosing. This is best incorporated into your website
2. Ensuring that whatever mechanism you choose incorporates effective moderation, to ensure that as few inaccurate or misleading reviews as possible are published, anywhere, on your website, on a review site or on Google
3. Then, and only then, begin to invite customers to write reviews

That mechanism? May we humbly suggest one that has been tried and tested for over a decade now? Welcome to HelpHound.

And finally...

We cannot, for obvious reasons, make any promises on behalf of the CMA, but common sense dictates that it is far more likely to pursue 'current' rather than historic breaches. Businesses that take action to comply now are, in our opinion, far less likely to find themselves subject to regulatory action.

 

The CMA's new powers - fail one question and your business is vulnerable

There have been three important events in the last eighteen months regarding online reviews that every business should be aware of:

• The Digital Markets, Competition and Consumers Act 2024 gave the CMA vastly increased powers to sanction businesses misusing online reviews
• The CMA has invested in AI software to speed up the identification of businesses likely to be in breach
• The CMA has begun taking action, initially regarding five businesses (one being a review site), where it considers there have been potential breaches

Below is a checklist, in the form of the five questions to which the answer will be a simple 'Yes' or 'No', so you can identify if your business is in breach, and therefore what action it needs to take, if any, to avoid sanction by the Competition & Markets Authority (CMA).

1.  Does your business selectively invite customers to write reviews, either to a review site or to Google (or both)?

2.  Does your business employ any mechanism - a formal survey or a simple 'were you happy with our service?' type email to identify 'happy customers' before inviting them to write a review? 

3.  Does your business have control over the timing of reviews written by your customers?

4.  Can your customers only write reviews of your business if specifically invited to do so?

5.  Does your business use a review site - Trustpilot, Feefo etc. - to identify those customers most likely to leave a 5* review and then invite those, and only those, to post a review to Google?

If you cannot answer 'No' to all of the above five questions, your business is in breach of the CMA's core regulations*.

*We cannot, of course, make any promises as to any course of action the CMA is likely to take in any individual case, but logic indicates that businesses that have taken steps to correct breaches, or that were in breach in the past but are no longer, are unlikely to be the first targets for regulatory or legal action by the CMA.

What will the CMA do?

First: what it will not do: the CMA will not warn any business that it is about to become subject to either investigation or sanction; it will consider that its press releases over the years have provided sufficient warning.

Past history indicates that the CMA is highly unlikely to initiate action against a business and subsequently find it not at fault. The CMA will only initiate action where it considers that it has a watertight case. 

CMA fines, even before the 2024 Act gave them the power to levy fines of up to 10% of a business's turnover, were never insignificant. The case of the four Bristol estate agents that were fined £370,000 for illegal price-fixing is instructive in this regard.

The 'we're too small/insignificant' argument that we have heard so often in the past ceases to hold water now that whistleblowers, combined with the CMA's own AI, make it economically viable for the CMA to sanction businesses regardless of size. From our discussions with the CMA, resources are a critical factor, and anything the CMA can do to bolster these or show HM Treasury that its ROI is providing a positive financial impact will undoubtedly be viewed positively.

Our advice?

It couldn't be simpler: comply with the CMA regulations. Now. 

How?

We fully understand the reasons why businesses have cherry-picked (invited only customers they were certain would write a positive review) and/or gated (pre-qualified customers before inviting only those likely to leave a 5* review) in the past. Inviting 'everyone' was considered a risk too far. But the benefits of having a great score, especially a great score on Google, were just too obvious to ignore.

Unfortunately for such businesses, that option was never on the table: the CMA's regulations have expressly forbidden such a strategy for many years now. One can see the CMA's logic: how are consumers to trust a business if it is somehow able to filter reviews to ensure that only those that show the business in a positive light ever make it onto the web? On top of that, how are consumers to trust reviews as a whole?

This has, until now, given a great many businesses a stark choice: avoid engaging with reviews altogether or flout the CMA regulations. The first sacrifices far too many benefits (increased enquiry rates and lead flows, social proof and SEO, to name but a few). It also runs the increasing risk that a minority of disgruntled customers can 'capture' a business's online image. 

The second of those is no longer viable, as we have explained above. The risk of sanction is now just too great (and the sanctions are far too severe to contemplate). 

Achieved thanks to moderation - search 'estate agent Kingsbury' and see how this business shines in full compliance with the CMA regulations

That's where moderation - the act of employing an external moderator to ensure reviews are as accurate and reflective of the reviewer's experience of the business as possible*, comes in - it's an extra expense, admittedly, but one that will a) ensure compliance with the CMA regulations and b) protect your business from factually inaccurate, potentially misleading or just plain unfair reviews. 

*Moderation relies on the cooperation of the reviewer. In our long experience, an average of 7 reviews in 100 require intervention of some kind by our moderators, to invite the reviewer to correct errors of fact or rewrite a potentially misleading comment. In only 3 cases in 100 where our reviewers become involved does the reviewer decline to do so. Put yourself in their position: who, knowing the business will post a response to their review, will persist in writing one that contains inaccuracies?

The 'Perfect Business' - does it need moderation?

We come across these less and less these days. Why? Not because businesses have become slacker, but because more and more consumers have come to understand the power a single well-crafted review has - especially if written on Google - to hurt such businesses.

We continue to encounter many businesses whose perfect Google score of 5.0 has been impacted by an inaccurate or misleading negative review. Some might reasonably say, 'But that's just one among dozens (hundreds even)', and they would be mathematically correct. But consumers have also learned how to read reviews: these days they will often select the 'lowest' button...

...and if the reviews they then read are credible, they will often move swiftly on to another similar business.

How do we know this? Because of the urgent calls we receive from businesses where a single negative review, often inaccurate and sometimes unfair in the extreme, has resulted in their inbound enquiry flow falling measurably. Retroactive review management - known as 'reputation management' in the trade - is far less effective than proactive moderated review management.

And Finally...

Even when businesses understand all of the above, they are left asking one crucial question: 'Does this mean we have to actively invite every single one of our customers/clients/patients to write a review?'

The answer is 'No'. The 'golden key' to review management is twofold: first, an intimate understanding of the CMA regulations and then this button, allowing anyone to review your business when on your website...

To see this working live - both the 'Write a review' process and the 'What is HelpHound?' explanation, click here

...the key word here is 'allow'. This makes your review management practice compliant. The CMA understands that there are circumstances where a business wouldn't want to proactively invite a customer to write a review, but they do require you to provide a mechanism to 'allow' them to do so. We probably don't need to repeat it, but all reviews written by people clicking that button are sent directly to pre-publication moderation. How much better than a factually inaccurate or misleading review on Google?

Quinux Acquoxis - a great example of reviews-based 'hit and run' marketing

The name, with hindsight, probably gave us a clue. So what are we talking about here? It's a 'miracle' pressure washer. And if you watch YouTube at all, you will have seen their advertisements in the last three weeks - perfectly timed for the Easter/Spring garden/DIY spending surge. 

Here is just one of their websites.

Let's take a look...

Note the prominently displayed stars and score (4.8), as well as the tab, which leads to these...

all, as far as we have been able to establish, fake. No source.

This as well...

Not entirely sure what the customers who voted the item 5.0 for 'Comfort' were referencing

We did a quick scrape of the usual websites to see if we could find any genuine reviews. Here's Trustpilot...

Nice of Trustpilot to give them a score of 1.9 or 1.4; 2.9 even better, given that between the three listings there's only one 5* review - and that is thanking the business for a full refund! At least Trustpilot cannot be accused of lending credibility in this instance, but we are surprised that they will even grant a listing, let alone three, to such a business.

The point at issue here is that unscrupulous businesses - in this case, the parent appears to be a company called 'Cablelinker' based, again 'allegedly' in Hong Kong - can bypass the conventional online review channels entirely to make a quick buck. There are undoubtedly tens of thousands of unhappy new 'owners' of one of these seriously misrepresented and overpriced product (£50 in the UK - the same product can be had for £10 by searching Google shopping). 

We will forward this article to the CMA in the hope that the advertisements on YouTube can be shut down.

The CMA's crackdown on review abuses gathers pace - important!

The full text of the BBC report is here. Businesses cannot say they weren't warned. The CMA has been issuing warnings for a long time now, and we have repeated them on this blog, alongside advice on what action businesses should take to ensure compliance.  The 2024 Digital Markets, Competition and Consumers Act gave the CMA massive additional powers to enforce and fine non-compliant businesses.

First of all: why is this 'important'?

Because a large proportion of consumers have come to rely on reviews before making purchases or engaging services. If those reviews are gathered or displayed in ways that in any way favour the business at the expense of the consumer, then the CMA has a legal duty to step in. 

In addition, if consumers lose confidence in online reviews as a resource, then they lose a valuable aid to decision-making when considering such purchases, and the businesses themselves lose valuable social proof.

The CMA Action

Here is a summary of the reasons behind the action being taken by the CMA:

• Feefo and Autotrader are under investigation over whether they denied consumers a "fully rounded" picture online of other people's experiences by not including some bad reviews.

• Just Eat is being probed over whether its rating system inflated certain restaurants' and grocers' star ratings.

• Dignity is being investigated over whether it asked staff to write positive reviews about the firm's cremation services, giving people "a potentially inaccurate picture" of customers' feedback.

• Pasta Evangelists is being looked at to see whether customers were offered discounts on future orders in exchange for leaving 5-star reviews on delivery apps without this being disclosed.

 

Here is the full CMA press release. We suggest you read the full text here, along with our comments, and refer to the original for links.

Comments

1. This action should be seen by any business that is proactively engaged in inviting and/or displaying reviews that the CMA is 'on their case' and that compliance is no longer a 'nice to have' addition to their review management strategy, but core to it.
2. Interestingly, the CMA refers to 'fake reviews' when their action covers, but is not confined to, them. They are also concerned that negative reviews are being suppressed, and that consumers are being prevented from posting their honestly-held opinions at a time of their own choosing.
3. The sanctions - fines - for non-compliance have been massively increased (to 10% of global turnover).
4. This is the first in what we fully expect to be an ongoing campaign by the CMA. More businesses will be investigated in a rolling programme.
5. That programme will be enhanced (and accelerated) by the investment the CMA has made in AI investigative technology. No longer will the CMA be solely reliant on its manual investigations and whistleblowers - although we are certain that both will continue.

And finally...

This article would be incomplete without providing you with a reference to the CMA regulations. If you have any questions whatsoever, please do not hesitate to speak to us.

AI search - why Google reviews (and scores) are now absolutely vital

Regular readers will know that we have been banging the drum for Google reviews since the beginning of the 2010s; we may even have, wrongly, of course, given the impression to some that we only focus on Google reviews on our clients' behalf. 

The following have been our priorities for well over a decade, and we cannot see them changing any time soon:

1. Get a great score from as many Google reviews as possible
2. Get as many reviews to your own website as possible, so that they can be moderated and then copied across to Google
3. Keep an eye on the other review sites, and channel reviews to them as and when necessary

No. 3 comes into play when a business finds that negative reviews on other sites are being mobilised by their competitors. Trustpilot is an obvious example. If we see a client's score fall below 4.5 on Trustpilot or any other review sites with reach, we will advise them to channel a proportion of their reviews to that site to maintain their score. 

How?

It is easily done: we simply add a link to the business's listing on the relevant site to the existing invitation.

Does it work?

Yes. It has been tried and tested over several years. Customers of good businesses understand the power of factually questionable or misleading negative reviews to harm businesses and are, providing the email is worded correctly*, more than happy to support them by writing multiple reviews (usually by simply copying the first review they write to the secondary sites).

*'Email' and 'worded correctly': both of these are important. Email because it has been. proven time and again that text requests for reviews elicit one or two-word reviews, but email requests result in far more helpful reviews, for readers as well as the business. 'Worded correctly': we have, as you might expect, well over a decade's worth of experience in testing both response rates and quality of response. We will advise on the best wording.

So: back to the headline - which reviews 'surface' (get used to the new use of that word - meaning 'referenced by') most consistently in AI search?

The best way to answer this crucial question is to conduct some popular searches. Here are three...

1.  'Best estate agent in my area'

2.  'Best estate agent in [location]'

3.  'Best vet in my area'

4. 'Best GP in my area'

5. 'Best wealth manager near me'

Just out of interest, here's what happens when we change one word in our search, replacing 'best' with 'top'...

...and here's what ChatGPT returns for 'Best estate agent in [location]'...

So: is our current Google-focussed strategy still the right advice for clients? The simple answer is a resounding 'Yes'. You don't see any review sites referenced or linked to in these answers. What you do see is two consistent sources...

1.  The business's own reviews (as distinct from Google reviews) from its own website being surfaced...

Yes. Follow the grey 'Winkworth' link, and you will arrive at the business's own website, and the source of the score and 'hundreds of reviews': the business's own reviews, moderated and processed by HelpHound

2.  In default of the AI search finding the business's own reviews on the business's own website, it will return results based on Google reviews, as you can see above. Almost always, the business with the highest score is ranked first. 

What we struggle to find, unless the AI is specifically asked for them, are reviews and scores hosted by the review sites, as in this search...

...but even then, Google reviews are, quite rightly in our opinion, referenced the most. Why 'quite rightly'? Simply because...

• Google reviews are free for both the reviewer and the business under review
• Google reviews are consistently returned in every search
• Google reviews carry greater credibility with consumers
• Google hosts 81% of online reviews
• The next largest review sites are Facebook, Yelp and TripAdvisor

Goodness, are we glad we backed Google. And so, we are sure, are our clients.

Further information

If you would like a more in-depth and technical description of the AI search process, we recommend typing 'describe the process AI uses to provide search results' into Google (Google Gemini - Google's AI - will lead the results of that search, however it is performed). It will provide links to all the information you need. Including this helpful video...

AI search makes hosting your own reviews, and then getting them to Google, more important than ever

Trustpilot's recent results brought AI firmly into the reviews spotlight. Read this from Proactive Investors...

Regular readers may be mildly surprised to hear that we agree with every word. 

Let's now look at a ChatGPT local search; the kind of search millions make every day:

Bear with us, because this is important, very important. What do we see in the grey box right next to 'One of the highest-rated locally (around 4.9* with hundreds of reviews)'? That's right: a grey box with the word 'Winkworth'. So what, precisely, does that mean? Where is ChatGPT sourcing - or in search parlance, 'surfacing' - the reviews that make up the business's impressive 4.9* rating? From Google? No. From another review site (Trustpilot, even?). No. The score is based on the business's own reviews, hosted on its own website.

...all gathered using HelpHound. Oh! And don't worry, we've always had conventional search covered...

Leading in natural/organic local search, with the score, stars and number of reviews hosted on its own website showing prominently underneath

...and yes, however many consumers automatically assume those 776 reviews, the score, and the stars are from Google, they are not. We repeat: they are also sourced directly from the reviews on the business's own website. They are Winkworth's own reviews. Again, gathered using HelpHound.

Don't discount Google reviews. We certainly don't; they are the ultimate goal for almost all of our clients. Here is the client's Google Knowledge Panel.

...seen by everyone who searches for the business's name and location. Find almost any one of those 607 individual reviews, and there is a better than even chance that it found its way to Google thanks to a repost request initiated by HelpHound.

The client's review on the business's own website...

For anyone thinking 'How many people actually read the reviews on the business's website?', there's a clue here in the 'X people found this review helpful', in this case 'X' being '5'. We estimate that for every 'like', something in the region of ten people read the review without bothering to 'like' it. And what kind of person bothers to a) read the reviews and b) click on 'Helpful'? Yes. Exactly. Someone who is seriously considering using this business.

Then copied, at HelpHound's invitation, to Google...

All bases covered. Now and for the future.

 

Further reading

The ultimate secret of our, and our clients', success with reviews: moderation. Every single review is read before publication. Simple errors of spelling and grammar are corrected, and if there is any evidence at all of factually inaccurate comments or a statement that might reasonably be expected to mislead a reader, we engage with all parties concerned to give them the chance to correct the review pre-publication. Whilst this only happens on average 7 times for every 100 reviews, it is an essential safety mechanism for everyone concerned. It is this that gives businesses the confidence to invite reviews in the first place, whilst maintaining compliance with the law (the CMA regulations). 

The only other options for high-value professional businesses are a) to cherry-pick 'happy' customers to invite to write a review (against the law in the UK) or b) to ignore reviews altogether (and thus miss out on their power to drive new business, whilst at the same time remaining vulnerable to unmoderated negative reviews).