The Competition and Markets Authority (CMA) has invited views from the business community and consumers on the development of online reviews and endorsements.
Online reviews and endorsements are playing a growing role in helping consumers make shopping decisions, including finding hotels, selecting tradespeople and choosing cosmetics.
The CMA recognises that consumers are increasingly turning to such online services for guidance and that, accordingly, the services in question are becoming increasingly important for the businesses whose products and services are reviewed on them.
It appears that the CMA's focus will be on whether online sites offer consumers information that is sufficiently trustworthy and impartial. The CMA has noted that a number of potential concerns have been raised in this regard and it wants to establish whether those concerns are valid.
The CMA will be looking at a range of online reviews and endorsements, including those found on web blogs, video blogs, social media, specialist review sites, trusted trader sites, retail platforms and retailers' own websites. It will also look at the roles that media companies, online reputation managers and search engine optimisers play in helping businesses promote themselves and manage their image in relation to blogs and review sites.
This is currently a very informal investigation. Indeed, at this stage, the CMA is merely inviting businesses and consumers to share their views with it. The CMA wants to understand whether the sector is working well for consumers.
The deadline for responses is 25 March 2015, following which the CMA will decide what further action, if any, to take. If it does take further action, it could launch a more formal market study, initiate consumer enforcement action, advocate legislative change to government, provide guidance and/or seeking voluntary action from the industry. The CMA notes in its announcement of this request for information that it has recently taken action against two companies in relation to alleged breaches of the Consumer Protection from Unfair Trading Regulations 2008 which contain a general prohibition on unfair commercial practices, in particular misleading and aggressive practices.
This initiative forms part of the CMA's broader focus on evolving online markets. Over recent months, the CMA has been engaging with the business community on competition issues in the online sectors, as well as using its enforcement powers to crack down on anti-competitive behaviour restricting retailers' ability to use the internet to sell goods and services.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.