Competition Law and Fake Reviews: 0 Stars for Google and Amazon
Following the crackdown on large digital platforms prevalent in the current competition law sphere, the UK Competition and Markets Authority (CMA) has launched an official probe to investigate Amazon and Google. The probe seeks to investigate fake reviews which are prevalent on their platforms, as well as an alleged underground 'review market' where fake reviews are bought and sold. With the power of Big Tech becoming increasingly scrutinised under competition and consumer protection law, the pressure for large technology companies to take responsibility continues; this case is no exception.
In 2020, the Financial Times launched an investigation into Amazon’s review system. The investigation uncovered suspicious activity on the platform, with evidence that users were profiting from posting thousands of five-star ratings. Specifically, this conduct was engaged in by smaller Chinese companies, which frequently gifted free items to reviewers in exchange for positive reviews. The investigation led to Amazon deleting over 20,000 product reviews, written by seven of the top ten UK reviewers. This is because, unlike other platforms where influencers may receive free gifts in exchange for a review, Amazon’s community guidelines prohibit “creating, modifying, or posting content in exchange for compensation of any kind (including free or discounted products) or on behalf of anyone else”. The problem is not limited to the gifting of goods in exchange for reviews, there also seems to be an underground rogue system where thousands of reviews can be bought and sold.
This phenomenon has been exacerbated by the coronavirus pandemic, which has led to more and more people using online marketplace platforms, including Google and Amazon, to purchase items during the several lockdown periods. The Amazon platform itself unwittingly fosters such behaviours as well, since algorithmically, higher reviewed products are listed first on search results. What is more, the Amazon algorithm also chooses the highest rated products and grants them the coveted ‘Amazon’s Choice’ badge. This signals to consumers which product to buy, especially in product categories in which products are largely homogeneous and quality cannot be distinguished by price.
The UK competition watchdog, the CMA, launched a preliminary investigation in May 2020 into the practices of the two tech giants. The first investigation uncovered that manipulated reviews on these platforms could influence £23bn in UK online shopping spending every year. The specific concerns noted by the CMA were that Amazon and Google were not doing enough to detect fake and misleading reviews following suspicious patterns of behaviour by users, or where necessary, investigate and remove fake and misleading reviews. The CMA also noted their concern about the lack of sanctions on reviewers or businesses, calling for a more adequate deterrence mechanism. This led to the launching of an official probe in June 2021. The CMA aims to protect online shoppers from being misled by fake reviews, with CMA chief executive Andrea Coscelli noting that businesses faking five-star reviews are given an unfair advantage over law-abiding businesses.
As previously mentioned, Amazon was made aware of this issue from the first Financial Times investigation and have since attempted to remove misleading reviews. In light of this antitrust probe, Amazon and Google have both shown their support to the CMA’s investigation. Statements from each tech giant respectively condemned the abusive actions of fake reviewers, showing their willingness to protect consumers while working along with the CMA to improve their review system. The CMA has not yet reported any findings or evidence of breach thus far.
The CMA launched the probe in its efforts to crack down on the trading of fake reviews. It conducted a similar investigation into Facebook, Instagram and eBay’s fake review problems on their respective platforms in 2019. This led to the platforms banning groups and individuals from buying and selling falsified reviews on their platforms. Facebook, although criticized for its slowness in taking appropriate action, changed its search tools to ensure it is harder to find fake review groups and brought in new automated processes to enhance the detection and removal of such content. Similar action could possibly be taken by Amazon and Google if the investigation finds a breach of the consumer protection provisions.
The Next Steps
If the CMA’s findings prove that Google and Amazon have breached consumer protection law, they have the power to take enforcement actions against the tech giants. The enforcement measures include seeking formal commitments from the firms to change the way they deal with fake reviews. There is also the possibility of instigating court proceedings, should there be resistance from the firms.
The CMA’s actions show that the war against the power held by Big Tech continues, and it is part of a new UK regulatory regime designed for Digital Markets. This can be attributed to multiple calls for large technology companies to have greater responsibility for moderating fake and fraudulent content on their sites, which includes fake and misleading reviews. Whether the CMA’s actions will achieve positive results for consumers remains to be seen.