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Online reviews can have substantial financial repercussions, and these potential repercussions encourage companies to plant fake, favorable reviews for their products, according to Sameer Kulkarni of Amity Business School in an article published by Business, Management and Economics Engineering. Kulkarni explains that published indications of consumer trust, like those contained in online reviews, help companies to attract new buyers and retain existing customers. If these reviews are doctored by financially motivated companies, Kulkarni contends this may ultimately erode consumer trust in review platforms and inhibit the successful functioning of online markets. Kulkarni argues that regulatory initiatives have so far struggled to curtail these manipulations of the marketplace. The EU, for example, recently found that about 55 percent of active online platforms violate its unfair commercial practices directive.
In a recent article for Law, Innovation and Technology, Mateja Durović and Tim Kniepkamp of King's College London discuss the inadequacy of current EU consumer law in protecting consumers from fake reviews online. They argue that an effective framework would minimize the manipulation of authentic online reviews by holding online platforms accountable for fake review violations. Among other suggestions, Durović and Kniepkamp recommend implementing reviewer identification processes that help platforms link opinion spam or reviews created by traders to bad actors. They also advocate limits on incentives that companies provide for submitting online testimonials. They suggest capping incentives at 5 percent of the transaction value, requiring disclosure of incentivized reviews, and excluding incentivized reviews from average ratings.
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