New rules on online reviews of products will be coming into force on May 28. Digital businesses will have to bear in mind new requirements in relation to users’ assessments of their products and take steps to improve the truth and authenticity of their comments.
The majority of the amendments of the General Consumer and User Protection Law (LGDCU) and the Unfair Competition Law (LCD) will be coming into force next May 28, as a result of the implementation of the Omnibus Directive in Spain. The Directive introduces, among other aspects, a series of obligations for businesses that rely on reviews made by purchasers. The aim of the Directive is in line with one of the pillars of consumer protection regulations: to increase the transparency of the information that consumers and users receive to help them reach an informed decision.
Why has the use of reviews multiplied?
The possibility of using reviews is crucial in digital businesses, since it reduces the traditional information asymmetries between buyers and sellers. Before these mechanisms appeared, we used to ask our circle of friends for recommendations, looking for “reliable” opinions that would help us reach a decision on whether to buy a particular item. Now, the possibility of writing a review and publicizing purchases on the Internet increases this circle of opinions considerably and gives us added trust. We can give our opinion on all types of products and services, from our stay at a hotel, service at a restaurant, how long a vacuum cleaner charge lasts and the “reliability” of a consumer who occasionally re-sells products on an Internet platform. The possibilities are endless.
For the European Commission, rating and reputation can be extremely useful to reduce the harmful behavior of some market participants (who are quickly classified as “not recommended” by unhappy buyers) and thus reduce risks for consumers. Another equally relevant factor, is the pressure to obtain positive reviews, which clearly acts as an incentive for businesses to increase the quality of their products and services in the knowledge that they are subject to public scrutiny (as indicated in A European agenda for the collaborative economy, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions. Brussels, June 2, 2016. COM (2016) 356 final).
Why is it important to regulate the use of reviews?
The benefits associated with reviews are only feasible if we can trust their quality, or in other words, authenticity. Misused, reviews can have the opposite effect, i.e. mislead users as to the true qualities of a product or service. That is, there could be a temptation to try to “buy” favorable reviews instead of improving our products and services and obtaining the reviews legitimately.
For example, there are numerous product reviewers that are paid for writing an opinion. This practice can be perfectly legal and many users have thousands of followers who are all too happy to hear an opinion on a particular product or service. For example, videos of unboxing where the vlogger in question literally unpacks a product that he or she has just purchased and tells us all about their purchase experience and use. However, the condition, as always, is to provide this information to consumers. For example, by indicating that it is a sponsored review or that the product has been given to the reviewer free of charge to try.
Some fraudulent practices have also proliferated such as the generation of positive opinions generated by bots to improve opinions and/or positioning artificially. In my opinion, online stores are the main parties interested in avoiding these practices since, if they become widespread, they may eventually affect consumers’ trust in the store. Indeed, businesses are increasingly turning to mechanisms to control published reviews in order to detect dishonest practices, since they know only too well that consumer trust is crucial.
What obligations does the LGDCU introduce?
In this context, the LGDCU introduces a new article 20.4 that deals precisely with regulating the use of mechanisms to verify reviews by traders.
“Commercial practices in which businesses provide access to reviews by consumers and users on the products and services, must provide information on whether the business guarantees that the published reviews originate from consumers and users who have actually used or purchased the products or services. For this purpose, businesses must provide clear information to consumers on how reviews are processed”.
That is, the aim is to increase transparency on how published reviews are processed by users. It is important to bear in mind that online stores are not being obliged to guarantee the origin of the reviews. The aim is to ensure that if an online store states that its reviews are authentic, in that they have been published by a “real” purchaser of their products and services, they must explain to consumers the mechanisms that have been used to verify that the review has been posted by someone who has actually purchased the product. For example, many online traders only allow reviews to be published after the consumer has purchased the product.
What obligations does the Unfair Competition Law introduce?
Article 27 of the Unfair Competition Law considers the following practices unfair because they are misleading:
“7. Stating that reviews of a product or service are submitted by consumers and users who have actually used or purchased the product or service, without taking reasonable and proportionate steps to check that they originate from such consumers and users.
- Submitting or commissioning another legal or natural person to submit false consumer reviews or endorsements, or misrepresenting consumer reviews or social endorsements, in order to promote products or services.”
As can be seen, businesses’ obligations in ensuring that the mechanisms used by online stores are truthful and accurate are now stricter. However, in relation to online stores that publish opinions by third parties, it is important to take into account that the obligation refers to the means used and not the results, on the understanding that the latter could be too onerous for businesses. The lawmakers’ aim is to implement “reasonable and proportionate” measures, not to guarantee that the reviews have not been manipulated.
In prohibiting the direct or indirect use of false reviews as a means of promotion, lawmakers are simply reinforcing a rule that already formed part of the general prohibition on misleading acts contained in the Unfair Competition Law. However, this reminder is not redundant, since it makes it completely clear that the use of these techniques is not lawful.
Consequently, online stores that rely on reviews by users should scrutinize whether their systems are in line with the provisions that will come into force on May 28 and specifically, whether they have reasonable measures in place to be able to affirm that the reviews they publish are authentic or have been verified in some way.