Even before the advent of the Covid-19 pandemic, a majority of Indian households had begun to prefer shopping for products online instead of going to the markets. One of the reasons for opting for e-commerce platforms over the conventional avenues is the multitude of reviews available that allow a consumer to make an informed decision. As per a recent report by CHEQ (“THE ECONOMIC COST OF BAD ACTORS ON THE INTERNET, FAKE ONLINE REVIEWS 2021”), online reviews influenced close to $3.8 trillion of global e-commerce spent in 2021. [1]

Lately, however, the number of fake reviews on such websites has been rising steadily, thus defeating the very purpose of those reviews. The report by CHEQ defines a fake online review as “any positive, neutral, or negative review that is not an actual consumer's honest and impartial opinion and does not reflect a genuine experience of a product, service, or business. The sites on which reviews appear are multiple: ranging from online brands making online feedback part of their core offering (such as Amazon), sites that embed third-party review platforms such as Expedia, and platforms whose core purpose is to provide reviews and feedback (such as TripAdvisor)”. [1] According to a 2019 Daily Mail investigation, sellers on Amazon had been purchasing fake reviews for about INR 1,200 (USD 15).

Taking cognizance of this issue and with a view to preparing a roadmap to tackle the same, the Department of Consumer Affairs of India (DoCA) in association with the Advertising Standards Council of India (ASCI) held a virtual meeting on May 27, 2022, calling upon the various stakeholders such as e-commerce giants like Flipkart, Amazon, Tata Sons, Reliance Retail and others, besides also inviting Consumer Forums, Law Universities, Lawyers, Federation of Indian Chambers of Commerce and Industries (FICCI), Confederation of Indian Industries (CII), Consumer Rights Activists, etc.

In a letter addressed to the stakeholders prior to the virtual meeting, Mr. Rohit Kumar Singh, Secretary, DoCA, shared a Press Release of the European Commission dated January 20, 2022, highlighting the results of an EU-wide screening of online consumer reviews across 223 major websites. The screening results underlined that at least 55% of the websites violated the Unfair Commercial Practices Directive, 2005 of the E.U. which required truthful information to be presented to consumers to make an informed choice. Further, the stated Press Release mentioned that in 144 out of the 223 websites checked, the authorities could not confirm that traders were doing enough to ensure that reviews were authentic i.e. if they were posted by consumers who had actually used the product or service that was reviewed.

The above-stated letter also stated, “It is relevant to mention that with growing internet and smartphone use, consumers are increasingly shopping online to purchase goods and services. 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 experiences 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. Since the issue impacts people shopping online on a daily basis and has a significant impact on their rights as a consumer, it is important that it is examined with greater scrutiny and detail.

Akin to the 2005 Directive of the E.U., the Consumer Protection Act, 2019 of India protects the consumer’s right to be informed. Specifically, Section 2(9) of the Act states, “Consumer rights” includes,— (ii) the right to be informed about the quality, quantity, potency, purity, standard, and price of goods, products, or services, as the case may be, so as to protect the consumer against unfair trade practices.

During the meeting, all stakeholders concurred that the issue at hand deserved to be observed meticulously and a suitable framework for the same may be established in the interest of the consumer. Among the issues discussed were paid reviews, unverifiable reviews, and the absence of disclosure in case of incentivized reviews which make it challenging for consumers to recognize genuine reviews.

According to an official statement made pursuant to the virtual meeting, the Department of Consumer Affairs (DoCA) will develop frameworks to keep a check over fake reviews on e-commerce websites after studying the present mechanism being followed by the e-commerce entities in India and the best practices available globally.

 Citations: [1]https://f.hubspotusercontent00.net/hubfs/5228455/Research/Fake%20Online%20Reviews%202021.pdf