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TODAY'S OTHER NEWS

CMA publishes open letters warning against fake and misleading 'customer' reviews

The Competitions and Markets Authority has sent two open letters - one to online publishers and one to marketeers - warning of the dangers of fake online reviews.

This is the latest installment in the CMA’s investigation into online review sites - including those for estate agencies and other property players - and the authority’s bid to ensure greater transparency for consumers.

Last summer the CMA called for evidence from interested parties for its investigation and earlier this year we reported on its new guidelines

In recent months the estate agency industry has been rife with rumours and accusations concerning reviews as a result of the growth in the number of review sites. 

Now this week the authority has published these two open letters. 

In the first it warns online bloggers and publishers that any reviews which they are paid to carry - whether payment is in cash or otherwise - should be clearly marked as such. “This is more than just a question of good practice: consumer protection law does not allow for the use of editorial content in the media to promote a product where a trader has paid for the promotion, unless this has been made clear to the consumer.”

In the second, and much longer, open letter the CMA tells marketing departments of businesses that review that are in fact merely paid promotions should be clearly identifiable to readers and viewers, and that marketing staff or third party organisations used to promote businesses should be made aware of the CMA’s instructions. 

The two letters are reproduced in full below.

CMA’s open letter to online publishers and bloggers 

You may be aware that the Competition and Markets Authority (CMA) has been investigating the use of online reviews and endorsements to ensure that they are being used in line with consumer protection law. You can find more information on this on the case page. 

The CMA has recently concluded an investigation into the failure of three businesses to clearly identify where they had paid bloggers or online publications to feature particular products in their blogs and articles (paid promotions). You can read more about the case on the CMA’s webpages. 

Blogs, videos and other online publications have become part of everyday life and influence people’s buying decisions. It is our view that everyone involved in online endorsements is responsible for ensuring that paid promotions are clearly labelled or identifiable as paid-for content. This includes bloggers, vloggers, micro bloggers (who comment on social media, including celebrity tweeters), and online newspapers and magazines. 

What does this mean for you? 

Online publishers and bloggers should make sure that, if they are paid (whether financially or otherwise) to feature products in the content on their sites, then the paid promotions are clearly labelled or identifiable as paid-for content. 

This is more than just a question of good practice: consumer protection law does not allow for the use of editorial content in the media to promote a product where a trader has paid for the promotion, unless this has been made clear to the consumer. 

Further guidance on consumer protection law can be found on the CMA’s webpages or by visiting the Business Companion.1 

The CMA has also produced a brief guide for businesses commissioning paid-for endorsements, summarising how to comply with consumer protection law. 

In conclusion 

Blogs, videos and other online publications influence people’s buying decisions. While paid-for editorial content is perfectly legal, it is important that you are open and honest about it with your audience, so that they do not think they are getting independent information when a business has in fact paid to influence the content. 

Misleading readers or viewers may not only damage your reputation – it also falls foul of consumer protection law and could result in enforcement by either the CMA2 or Trading Standards Services, which could lead to civil and/or criminal action. 

Thank you for reading this letter. We hope you will find it helps you to handle paid-for editorial content in a way that gives your audience the full picture. 

Yours faithfully, 

Project Manager 

-

CMA’s open letter to marketing departments, marketing agencies and their clients 

You may be aware that the Competition and Markets Authority (CMA) has been investigating the use of online reviews and endorsements to ensure that they are being used in line with consumer protection law. More detail can be found on the case page. 

Online reviews, and endorsements, including those made by bloggers or on social media, have become part of everyday life and significantly influence people’s buying decisions. 

This letter addresses our concerns in the following two areas: 

(i)  clearly labelling or identifying paid promotions; and 

(ii)  writing, commissioning and publishing fake reviews. 

Online endorsements – paid promotions 

The CMA has recently concluded an investigation into the failure of three businesses to clearly identify where they had paid bloggers or online publications to feature particular products in their blogs and articles (paid promotions). You can read more about the investigation on the CMA’s webpages. 

The use of editorial content in the media to promote a product where a trader has paid (financially or otherwise) for the promotion, without making this clear to the consumer, is unlawful and may lead to enforcement action. 

What does this mean for you? 

Businesses that pay for promotions in articles or blogs should ensure this has been made clear to readers/viewers, for example by: 

clearly identifying or labelling paid promotions; 

providing clear instructions to marketing agencies and anyone else involved in the publication of paid promotions on how to implement this; and 

ensuring that their policies on paid promotions reflect the requirements of consumer protection law and that their marketing staff are aware of the requirements of the law. 

Marketing agencies and other intermediaries which arrange for paid promotions to be published should ensure that they are clearly identifiable by readers/viewers, for example by: 

instructing online publications and bloggers to clearly label or identify paid promotions; 

ensuring their policies reflect the requirements of consumer protection law and that their staff are aware of the requirements of the law; and 

turning down requests from businesses to arrange paid promotions which are not clearly labelled or identified. 

It is our view that everyone involved in online endorsements is responsible for ensuring that paid promotions are clearly labelled or identified. This includes people who instruct, facilitate, arrange or publish paid promotions. This content is read by consumers, irrespective of why it was created, who may rely on the information to inform their purchasing decisions. If it is not correctly labelled or identified, consumers may be misled into thinking it represents the author’s genuine opinion when a business has in fact paid to influence the content.

The CMA has also produced a brief guide for businesses summarising how to comply with consumer protection law in relation to online endorsements. 

Fake reviews 

The CMA has also recently concluded an investigation into fake online reviews posted by a search engine optimisation and online marketing company on behalf of its clients. You can read more about the investigation on the CMA’s webpages. 

Writing or commissioning a fake review – in relation your own products or someone else’s – is a breach of consumer protection law and may lead to civil or even criminal action. 

What does this mean for you? 

Businesses, and anyone acting on their behalf, should: 

not offer inducements to customers in return for writing positive reviews about their businesses; and 

not pretend to be a customer and write fake reviews about their own or other businesses’ products. 

The CMA has also produced a brief guide for businesses and marketing agencies, summarising how to comply with consumer protection law in relation to online reviews. 

In conclusion 

Blogs, videos and other online publications influence people’s buying decisions. Similarly, customers look to online review sites for information about a product or service they may want to purchase. 

While it is perfectly legal to market products through blogs, videos and other online publications or to invite customers to leave feedback on review sites, it is important that this is done honestly, openly and in compliance with consumer protection law. Misleading readers or viewers falls foul of consumer protection law and could result in enforcement by either the CMA3 or Trading Standards Services, which may lead to civil and/or criminal action. 

In deciding whether to take forward any such future action, the CMA will have regard to its published CMA Prioritisation Principles.

Further guidance on the CPRs can be found on the CMA’s webpages or by visiting the Business Companion. 

Thank you for reading this letter. We hope you will find it helpful in ensuring that you use these important and persuasive marketing tools honestly and legally. 

Yours faithfully, 

Project Manager

  • Simon Shinerock

    'I give the CMA 5 Stars for clarity speed and effectiveness, all their staff are helpful and responsive and overall I would thoroughly recommend them to anyone looking for the services of a state funded Quango' please note: the author has not received payment in the form of money or monies worth for writing this fake review

  • Mal McCallion

    Genuine consumer protection. Great to see.

  • icon

    Unsolicited reviews or recommendations are earned by providing a good quality service , and are always gratefully received, paid for sites that promote these reviews are surely soliciting for such reviews on behalf of their paying clients and reviews should be taken with a pinch of salt without using due diligence, such sites should be heavily policed and regulated to ensure their content is genuine.

    Algarve  Investor

    Can't disagree with any of that. Well said.

     
  • Caroline Deeprose

    There should never be a need to pay for an endorsement. If you are doing a great job anyway, they will come flooding in! Reassuring to see such stringent guidelines for all parties involved.

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