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4 hours ago
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The UK competition watchdog has launched investigations into five companies including Autotrader and Just Eat over concerns they have not done enough to tackle fake and misleading online reviews.
The Competition and Markets Authority (CMA), which has previously investigated the tech companies Amazon and Google, said its latest crackdown includes the funeral services operator Dignity, the review company Feefo and the restaurant chain Pasta Evangelists.
The CMA said that in the case of Autotrader and Feefo it was looking at whether a number of one-star reviews, moderated by Feefo, were excluded from being published on the car seller’s platform and therefore did not give consumers a full picture of other customers’ experiences.
The Dignity investigation focuses on whether staff were asked to write positive reviews about the company’s cremation services.
Just Eat, the food delivery company, is being investigated over concerns that its system “inflated certain restaurants’ and grocers’ star ratings”. Pasta Evangelists is facing an investigation over whether customers were offered discounts on future orders in exchange for leaving five-star reviews on delivery apps.
“Fake reviews strike at the heart of consumer trust – with many of us worrying about misleading content when looking at reviews online,” said Sarah Cardell, the chief executive of the CMA. “With household budgets under pressure, people need to know they’re getting genuine information – not reviews or star ratings that have been manipulated to push them towards the wrong choice.”
The CMA said that it has not yet reached any conclusions about whether any of the companies have broken UK consumer law, but that the latest crackdown brings the total number of businesses under review to 14.
A spokesperson for Autotrader said that the company was cooperating with the investigation.
“We endeavour always to operate as a responsible and compliant business and will cooperate fully with the CMA’s investigation,” they said.
The UK consumer body Which? has previously found that 89% of people use reviews when researching a product or service before making a buying decision.
Last April the CMA was granted new powers under the Digital Markets, Competition and Consumers Act that banned some practices relating to online reviews as “unfair and illegal”.
This gave the CMA powers to decide if consumer laws have been broken without having to take companies to court.
“We’ve given businesses the time to get things right,” Cardell said. “Now we’re deploying our new powers to tackle some of the most harmful practices head on.”
If the CMA finds that a company has broken the law, it can force it to change its practices, as it did with Amazon and Google, and has the power to impose fines of up to 10% of global turnover.
Sue Davies, the head of consumer rights policy at Which?, said: “Fake reviews erode trust in the market and can be costly for consumers, honest businesses and the economy as a whole – which is why it’s important to ensure customer feedback is genuine and trustworthy.
“Investigations are a welcome first step, but enforcement will be key: the regulator must be prepared to get tough, use its powers and issue serious fines if these companies aren’t playing by the rules.”
