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.