Watchdog launches probe into online reviews as consumers and rivals are holding businesses to ransom
Businesses are attacking one another and consumers are increasingly holding businesses to ransom through the medium of online reviews, a study suggests.
An incredible £23bn a year of consumer spending is influenced by online reviews on a wide variety of sites such as Amazon, Expedia and Trip Advisor, according to the Competition and Markets Authority (CMA), but there are growing concerns over how reviews are being used.
Businesses are ambushing their rivals with negative reviews, while customers are increasingly using the threat or promise of reviews as bargaining chips to gain discounts.
Meanwhile, some businesses are paying for positive online reviews.
The CMA has launched a probe into the practice of buying favourable online endorsements, which it says may be unlawful if consumers are not made aware.
CMA senior director Nisha Arora said: “Millions of people look at online reviews and endorsements before making decisions such as where to stay on holiday, or which plumber to use.
“We are committed to ensuring that consumers’ trust in these important information tools is maintained, and will take enforcement action where necessary to tackle unlawful practices.
“We have opened an investigation into businesses that may be paying for endorsements in blogs and other online articles where the payment may not have been made clear to readers.”