scorecardresearch
Follow Us:
Monday, August 15, 2022

Explained: Fake e-commerce reviews, and what can be done to curb them

The Centre is planning to develop a framework to curb fake reviews of products on e-commerce websites. What are fake reviews, and why do they pose a big problem? How do countries across the world deal with this problem?

Written by Rishika Singh , Edited by Explained Desk | New Delhi |
Updated: June 1, 2022 7:20:35 am
In a statement released after the meeting, the Department of Consumer Affairs (DoCA) flagged paid and unverified reviews as a challenge, and underlined the need for a framework. (File)

The Union government recently said that it plans to develop a framework to curb fake reviews of products on e-commerce websites after studying the “best practices available globally”. This was announced after a meeting of representatives of the Ministry of Consumer Affairs, e-commerce companies, and consumer rights groups on May 29.

In a statement released after the meeting, the Department of Consumer Affairs (DoCA) flagged paid and unverified reviews as a challenge, and underlined the need for a framework.

What are fake reviews and how do countries across the world deal with this problem?

Why do fake reviews pose a big problem?

Fake reviews were defined in a 2015 document of the European Parliament, the highest law-making body of the EU, as: “Any review that is not an actual consumer’s honest and impartial opinion, or that does not reflect a consumer’s genuine experience of a product, service or business.”

Subscriber Only Stories
Delhi Confidential: Who will hoist the Tricolour at the AICC headquarters...Premium
Justice Uday Umesh Lalit: ‘If (our) action is not up to the mark, s...Premium
India@100: A digitally-powered and sustainable innovation hubPremium
Imagining India at 100: Where Health is recognised as being critical for ...Premium

The DoCA also quoted a statement of the European Commission from January 20, 2022 which said that more than half of 223 websites screened by them (the Commission) did not follow guidelines on presenting truthful information to consumers.

Talking about the Indian scenario, the statement added, “Given that e-commerce involves a virtual shopping experience without any opportunity to physically view or examine the product, consumers heavily rely on reviews posted on e-commerce platforms to see the opinion and experience of users who have already purchased the goods or service. As a result, due to fake and misleading reviews, the right to be informed, which is a consumer right under the Consumer Protection Act, 2019 is violated.”

In India, fake reviews pose a threat to the consumer rights under the Consumer Protection Act, 2019. The Act states that the consumers have a right to be “informed about the quality, quantity, potency, purity, standard and price of goods, products or services”.

Advertisement

How much do people rely on online reviews?

The EU documents mention that around 70% to 80% of people in multiple surveys said online reviews play a part in their purchase decision.

With the growth of the e-commerce industry, the need for transparency has increased. In a 2018 report by Kearney, a global management consulting firm, it was estimated that by 2030 the e-commerce sector in India will be valued at $40 billion or more than Rs 3 lakh crore.

In June 2020, e-commerce company Myntra saw over 7 lakh first-time customers during their ‘End of Reason Sale’, a reflection of the growth experienced by the industry.

Advertisement

Rohit Kumar Singh, Secretary, DoCA, said that in India, ensuring the authenticity of the reviewer and the associated liability of the platform are the two key issues in the fight against fake reviews.

E-commerce players must disclose how they choose the “most relevant reviews” for display on their websites, he added.

Are there different sources of fake reviews?

In the 2015 report, different types of fake review sources were identified. One source is consumers reviewing a product negatively as they may have had unrealistic expectations. Another is service operators, such as hotels or shops, seeking to counteract negative reviews.

The last two types constitute more organised fake reviews – ones written in return of incentives provided by companies like discounts, vouchers, etc., and others that originate through operators that assist companies in managing their online reputation.

As the 2015 European Parliament report says, fake reviews are hard to detect and it is difficult to prove that a reviewer has been paid to provide a false review.

Advertisement

In a 2020 study, the Harvard Business Review said that a large and thriving market for fake reviews was discovered in private Facebook groups in the US.

“Sellers would use these groups to recruit people to purchase their products and leave an authentic-sounding five-star review, and then compensate them…for the cost of the product, any taxes and fees, and in some cases, a $5-10 commission,” reads an excerpt from the study.

Advertisement

It added: “The increase in reviews translated into a significant boost in sales, with these products experiencing an average 12.5% bump in their sales ranks.”.

What can be done to combat this?

Apart from India talking about a framework to tackle the issue, the UK recently said that it will outlaw fake reviews. The European Union covers fake reviews under its Unfair Commercial Practices Directive. Clarifying the directive, it said: “To make enforcement easier it is explicitly provided that selling, buying and submitting false consumer reviews in order to promote products is prohibited. Further, there is now a clear obligation to inform the consumers about the handling of reviews.”

Advertisement

E-commerce websites have also attempted to correct this problem that hurts their credibility.

Amazon says that it uses “machine learning tools and human investigators” to weed out fake reviews. Similarly, Tripadvisor claims to have removed more than 2 million posts from its website in 2019 – about 8% of the total in that year. This was done by using “fraud detection technology” employed by banks, it said.

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Explained News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
First published on: 31-05-2022 at 06:59:46 pm
0 Comment(s) *
* The moderation of comments is automated and not cleared manually by indianexpress.com.

Featured Stories

Advertisement
Advertisement
Advertisement
Advertisement