The Competition and Markets Authority (CMA) is a governmental administrative agency of the United Kingdom (UK) established to promote business competition and to prevent anti-competitive activities. The CMA began operations in April 2014. In unfair competition situations affecting consumer choice, the CMA enforces consumer protection legislation.
The Total SEO Case
In March 2016 a marketing firm agreed to cease writing falsely inaccurate online businesses reviews and to remove those already posted. The CMA investigation of Total SEO & Marketing Ltd (Total SEO), a search engine optimisation (SEO) and online marketing company, found over 800 falsely favorable reviews published across 26 different websites.
Total SEO has cooperated with the CMA investigators
The CMA has warned Total SEO clients that falsely misleading online reviews for their benefit might implicate them as well in Total SEO’s violations of the law. The small businesses involved are auto dealers and mechanics, landscapers, and other tradesmen.
The CMA has published for businesses an explanation of how to comply with the consumer protection law in posting online reviews, mainly:
- Public relations, media marketers, and SEO companies should not produce or commission phony online reviews for their clients, and
- Businesses should not hire agents to write phony reviews for them.
In another CMA case, two websites for artisan searches and three for housekeeping service reviews sites have agreed to correct their unreliable reports and presentations in response to CMA concerns.
A CMA senior director commenting on these cases emphasized three main points:
- More than half the UK populace uses online reviews for help in choosing what to buy, making them an increasingly important source of consumer information. Inaccurate, misleading, fake reviews can cause consumers to make the wrong decisions and ethical businesses to lose out unfairly.
- SEO companies, public relations firms, and marketers are valuable business services, but they must serve businesses lawfully. By the Total SEO enforcement action, CMA serves notice that fake online reviews for business clients are not to be tolerated.
- The Total SEO action is the latest to assure consumers that they can trust the opinions in the reviews they read online after the 2015 CMA report on online reviews and endorsements.
UK Consumer Protection Regulations
UK advertising codes similarly require easily identifiable marketing communications. Fast, confidential advice on compliance with the codes is available from the CMA Committee on Advertising Practice.
The importance of complete disclosure of the identities those responsible for online endorsements is evident as they are increasingly common as sources of information on which consumers may rely to decide which products or services to buy. Businesses that deceive mislead consumers may violate the consumer protection law and industry rules on advertising.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) prohibit unfair commercial practices generally and misleading and aggressive practices particularly. The CPRs ban 31 practices as prohibited in all circumstances. To claim falsely that a trader does not act for purposes of the trade or for a trader to claim falsely to be a consumer is a banned practice in either case. The CPRs are enforceable by the CMA through the civil and criminal courts. Only a court can judge whether a particular practice in fact violates the law.
CMA Business Advisories
The CMA has produced three 60-second summaries on compliance with consumer protection law on online reviews and endorsements and an infographic on consumer spending influenced by online reviews.
Online reviews should let customers see the true picture. In 2015, the CMA acted against another online marketer company that posted false and misleading online reviews for its clients. The company wrote reviews on behalf of businesses from various sectors and posted them on various websites. Online reviews should help consumers decide whether to buy the products or services reviewed.
Writing or commissioning untrue reviews could expose the writer or commissioner civil or criminal penalties, damage the public perception of the brand, and undermine consumer confidence in the integrity of reviews and review sites.
What business with products reviewed online need to do or not to do:
- Don’t assume the identity of a customer writing reviews about business products or services purchased
- Don’t hire anyone to write falsely inaccurate reviews or risk liability for what they do
- When working with a public relations firm, marketer, or SEO agency, see that they too follow the CPRs
- Never offer favors, money, or gifts to customers to write favorable reviews
What public relations managers, marketers, or SEO companies working on behalf of businesses need to do or not to do:
- Don’t write or arrange falsely misleading reviews for clients, or risk violating the law as well
- Train staff adequately and see that contracts, policy statements, business brochures, and related documents are consistent with the CPRs
- Advise clients that falsely inaccurate reviews violate the CPRs
Online blogs and videos influence buying decisions. Businesses know that persuasive endorsements can sell their products or services. For this reason, consumers should know when endorsements they read or watch are purchased.
It’s not illegal for businesses to pay for promotions in blogs, tweets, or online articles of what they sell so long as all concerned, businesses that want their products endorsed and media agencies that place such endorsements, permit consumers to know that the businesses endorsed bought the endorsements. Otherwise, they may violate the law.
How should online publishers inform the public of their status as paid to review or endorse a product or service online? They need to be sure that the review or endorsement content is clearly identifiable as having been purchased. As an example, they can label online posts or videos as “advertisements” or “commercial messages.”
What should businesses seeking endorsements of their products or services from online channels do? They should work with the channel to make sure that the published content is labelled clearly as purchased and that the endorsement be treated as an advertisement.
What should public relations or marketing agencies engaging with online publishers for their clients not do? They should not conceal the fact that the content they want published for their business is purchased, for they also may violate the law if that important fact is unclear.
To make sure such content is clearly identifiable as purchased, they should:
- Clearly instruct the publisher of the content as to how to identify it as purchased content and
- See that the marketer staff training materials, policies, corporate brochures, and contracts are consistent with the CPR requirements.