If there's one thing advertising can't buy, it's social proof.
Legitimate reviews, whether they're positive or negative reviews, can build or destroy a brand's reputation through the primary strength of digital commerce: a user driven experience, where shoppers both dictate and respond to marketing efforts based on authenticity and personalization.
But that same user experience can be easily manipulated. Truth in advertising laws apply to online reviews just as much as they apply to physical marketing efforts.
As recently as May 2022, the FTC announced a proposal for strengthening guidelines to deceptive advertising law, including stiffer penalties and a more thorough definition of how false advertising laws apply to fake reviews, particularly on social media.
But what happens when those same reviews are enacted internationally by two of the most prominent names in big technology?
The Marketplace for Fake Reviews on Amazon
It shouldn't come to anyone's surprise that fake reviews run rampant on Amazon. It's an unfortunate tactic which disreputable Amazon sellers have stooped to countless times, sometimes with results that can be almost hilarious.
Yet fake reviews aren't necessarily funny to both genuine Amazon sellers as well as consumers. Recent research has indicated that shoppers can ultimately wind up overpaying 12 cents for every dollar spent online as a result of fraudulent reviews—a sum that can be far from insignificant during a time in which inflation concerns are on the minds of most consumers.
The vast majority of fake positive reviews can frequently be so blatant that they're practically absurd, with machine learning and AI bots frequently being the cause. And while most discerning Amazon shoppers have learned to spot fake reviews almost automatically, they still constitute deceptive advertising as defined by the Federal Trade Commission.
But fake Amazon reviews aren't the only form of manipulation facing consumers shopping online. While certainly less prominent than Amazon, both Google, eBay, and social media platforms have drawn scrutiny over relatively lax policies on fake reviews.
The keyword here is "relatively." Amazon may not have pioneered social proof as a defining feature of digital marketing, but it certainly perfected it. As a result, an estimated 79 percent of US customers rely on Amazon reviews prior to making a purchase.
Yet overseas, the prevalence of fake reviews on Amazon and elsewhere have also met their own backlash.
Amazon, Google Face UK Probe Into Fake Review
One overseas legislative body has already begun to call Amazon to task for review fraud and manipulation.
The Competition and Markets Authority (CMA), the primary competition and consumer oversight regulator in the UK, announced the launch of a formal probe in June 2021 into whether or not both Amazon and Google have sufficiently protected consumers against the threat of fake reviews.
The probe came following an investigation in May 2020 into the trading and selling of fraudulent reviews on social media—most notably on Facebook and Instagram, the latter of which recently saw counterfeiters using their accounts to peddle wares, resulting in a federal lawsuit on behalf of Amazon.
“Our worry is that millions of online shoppers could be misled by reading fake reviews and then spending their money based on those recommendations,” said Andrea Coscelli, the CMA's Chief Executive in a press statement regarding the official probe.
“Equally, it's simply not fair if some businesses can fake 5-star reviews to give their products or services the most prominence, while law-abiding businesses lose out.”
Investigations, Transparency, and Review Manipulation
The investigation isn't the first time the CMA has launched an official probe into deliberately misleading testimonials online. As early as 2019, both Facebook and eBay were subject to the CMA's allegations of enabling a fake review marketplace, resulting in the removal of some 188 Facebook groups and the permanent banning of 140 eBay sellers.
The CMA's latest probe came less than two weeks after Amazon issued an official statement detailing their efforts to combat review manipulation, resulting in the deletion of over 200 million suspected fake reviews; many of them likely originating from China, where a bustling marketplace for fraudulent reviews continues to thrive.
The UK consumer watchdog group Which? also uncovered evidence in February 2021 of a global cottage industry devoted to the sale of positive reviews, including one German-based company which boasted of over 62,000 reviewers.
Yet if fake reviews result in a negative experience for sellers, few consumers may be aware of it. The World Economic Forum recently indicated that fake reviews may have influenced almost $8 Billion of annual spending in the US eCommerce market—a market that saw some $870.8 Billion in total sales during 2021.
Is Amazon Doing Enough to Prevent Bad Actors and Fake Reviews?
The CMA's report questions whether both platforms have taken adequate steps to detect and prevent patterns of suspicious behavior misleading consumers, as well as promptly removing suspected fake reviews and imposing sanctions on suspected bad actors.
The sale of incentivized reviews has been expressly banned on Amazon since 2016, despite a lawsuit Amazon filed the previous year against one California entity operating three different monetized review websites which promised four and five-star ratings.
Yet despite increasing security measures to combat review manipulation, a quick search on Amazon can reveal hundreds of fake reviews for any given brand at any given moment, with smaller businesses being particularly vulnerable.
The CMA investigation occurred just three days after the EU launched an official antitrust probe as to whether or not Google has favored its own services in online display ad bids.
The company had previously been fined $268 Million by the French Competition Authority for similarly exploiting its market share in online advertising previously in June.
While the CMA hasn't yet determined whether either entity has broken consumer protection law yet, they have indicated it could potentially escalate into legal action if the investigation did not result in a commitment to impose further sanctions on suspected offenders.
“It's important that these tech platforms take responsibility and we stand ready to take action if we find that they are not doing enough,” stated CMA Chief Executive Andrea Coscelli in a press statement.