Five companies are under investigation as part of a crackdown on fake reviews from the Competition and Markets Authority (CMA).
Online vehicle retail platform Autotrader, review platform Feefo, funeral company Dignity, online takeaway service Just Eat and restaurant brand Pasta Evangelists are being investigated by the CMA.
The regulator has noted the significance of online reviews, citing research from Which? that found that 89% of people use reviews when deciding to buy a product or service.
The competition watchdog is investigating the five named businesses to determine whether they have infringed consumer law. The CMA has said that so far it has not reached any conclusions about whether consumer law has been broken.
The investigations follow the banning of several practices relating to online reviews under the Digital Markets, Competition and Consumers Act (DMCCA). Under the legislation, fake reviews are automatically deemed unfair and illegal.
Practices the CMA is looking for include obtaining and posting fake reviews, and paid-for reviews that are not clearly marked as incentivised as well as if negative reviews are hidden or if star ratings are being used to present an inaccurate picture.
“Fake reviews strike at the heart of consumer trust – with many of us worrying about misleading content when looking at reviews online,” said CMA chief executive Sarah Cardell.
“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.
“We’ve given businesses the time to get things right. Now we’re deploying our new powers to tackle some of the most harmful practices head on.”
The newly launched investigations bring the total number of businesses under review using the CMA’s new consumer powers to 14.
“This investigation shows how seriously UK regulators are taking consumer law. The CMA now has the power to issue fines of up to 10% of global turnover for these kinds of breaches, meaning Autotrader and others will be taking this investigation very seriously,” said Iona Silverman, IP and media partner at the law firm Freeths.
“In my experience, very few companies have implemented fake review policies to address the risks posed by fake reviews, but this investigation may be the wake-up call that companies need. It is incumbent on them to have a process in place to ensure reviews present a fair and accurate picture of their offering.”