HM Insights

What can you do about bad or fake online reviews which are damaging your business?

The huge surge in online sales during lockdown will have long term impact on buying behaviour. It is generally accepted that even when lockdown rules ease the gulf between internet sales and retail sales will still remain in place, with many shoppers now happier to browse by a click or swipe rather than wandering masked through shops. While this is good news for those selling on the internet, it will also increase the reliance of shoppers on customer reviews.

A bad review can have a direct impact on your bottom line and so all online sellers are conscious of the risk that a bad review might be posted by a disgruntled customer, whether they have a genuine grievance or not.

This was highlighted in the recent report of an American living in Thailand who, unhappy that a hotel wanted to charge him a corkage fee for bringing his own bottle to the restaurant, posted a number of negative reviews of the hotel online. But this time the hotel fought back. They tried to contact the individual and when he didn't respond they took full advantage of Thailand's harsh defamation laws and involved the police. This resulted in the poster's arrest and he spent two nights in jail before he was released on bail.

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What are the laws on defamation in relation to reviews?

Thailand is not the only country which has made defamation a criminal offence (the crime can be punished with up to two years in prison); but it is a further factor that under its laws action can be taken even if the statements made are true, unless there is a "public interest" in making the statement.

Such measures will not be introduced in the UK, despite concerns over the impact of fake or misleading reviews on businesses and consumers. That concern has led the UK Competition and Markets Authority (CMA) to launch an investigation into fake and misleading reviews on several major websites.

The power of such reviews is surprising. Last year the CMA estimated that online reviews potentially influence some £23 billion of UK customer spend each year - and with the lockdown boost to online sales that can only have increased.

The CMA investigation will focus on fake reviews which encourage consumers to purchase the relevant goods or services, such misleading advertising already being illegal under consumer protection law.

What can you do about reviews which attack your business?

The aim to protect consumers against such misleading advertising is welcome. But what about the businesses targeted maliciously by a customer or by a competitor? Without the criminal sanctions in countries such as Thailand, what can they do to protect their own business from such attacks?

Where the review is on your own website, in the interests of openness most businesses would then look to comment back on the review by offering a constructive response to criticism. They may wish to remove the review altogether – having terms and conditions on the website which allow the owner to remove comments they consider are not genuine is a starting point – but of course it does run the risk of removing a genuine complaint which may trigger wider comment on other social media platforms.

And if the review is on a social media or other platform, such as Facebook, Instagram or Amazon or TripAdvisor, you are bound by the rules of the platform itself. These platforms do have policies to allow you to complain about non-genuine reviews and they will be concerned to ensure nothing on their platform is defamatory, as that can make the platform liable as the publisher of defamatory statements. But for defamation to apply the statement must be untrue and so a platform won't remove it just because it is negative – they have to be shown that the review is fake and not just one from someone who had a bad experience.

But it's partly the failure of some platforms to police this properly which has triggered the CMA investigation. It can be easy to identify some fake reviews – they may not relate to the specific product or service; or the platform could identify a pattern from the posting email address.

The CMA is not currently alleging that any platform has acted illegally. The aim of its investigation is to ensure that such platforms have robust systems in place to find and remove fake reviews or reviews that mislead people about a product or business. And the CMA has stated that it will take enforcement action to secure the necessary changes if it finds that any of these websites are not doing what is legally required.

The outcome will benefit both consumers and businesses which are targeted – let's hope that at its conclusion we can give the CMA a genuine five-star review.

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If your organisation requires legal advice in relation to the issues raised, please get in touch with a member of our team.