On 20 June 2021 the Government finally published its consumer paper for consultation. It is titled Reforming Competition and Consumer Policy. The closing date for responses is 11.45am on 1 October 2021.
The document is 147 pages long! So I am doing a summary/opinion pieces on areas of the consultation.
See ADR: A Government consultation for my response to the section on Alternative Dispute Resolution and Subscriptions: A Government Consultation for response on subscription traps.
An edited summary of “Chapter 2 Consumer Rights” page 91 – 95 inclusive from the consultation policy is below:
Genuine reviews can of course be helpful to consumers. However, as the Government points out in its paper, the “Digitisation of consumer reviews and the ease of posting these have created a growing ‘industry’ that thrives on creating and selling fake reviews…”.These can mislead consumers into thinking products and services are better or worse than they are. This can misrepresent what is going on in different sectors for both businesses and consumers.
“In 2019 the EC Consumer Conditions scoreboard showed that 26% of UK retailers encountered positive fake reviews by their competitors or negative fake reviews on themselves.” Commissioned reviews written by most influencers or consumers are genuine.
The Government’s policy aims to build on the work undertaken by the Competition and Markets Authority and Which? Their work outlined the fake reviews on Amazon as an example, and “Writing fake reviews which are in fact hidden adverts or hidden attacks on competitors” A new small business may rely on reviews to get their products or services talked about and known, where they do not have the budget for advertising.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) currently prohibit 31 specific commercial practices which are unfair in all circumstances. It could be considered that these Regulations cover fake and misleading reviews. But Government is looking at “whether to explicitly prohibit the commercial practice of commissioning consumer reviews – in all circumstances – or a narrower prohibition on the commercial practice of commissioning fake consumer reviews.” Government is considering amending the CPRs to add to the list of unfair practices set out in Schedule 1 either through:
“Option 1: Commissioning a person to write and/or submit fake consumer reviews of goods, services, or digital content.
Option 2: Commissioning or incentivising a person to write and/or submit a fake consumer review of goods or services.
The word “commission” in Option 1 is used here to mean the commercial practice of making a request (which need not be in any particular form, nor in writing) in exchange for a payment (monetary or non-monetary) or reward. The word “incentivise” in Option 2 is used here to mean an offer of payment, reward or any other form of incentive or inducement to encourage a person (to write and/or submit a fake consumer review of goods, services, or digital content).”
Government also proposes to regulate sites which host consumer reviews of goods or services. They should take reasonable and proportionate steps to ensure that the reviews originate from consumers who have actually used or purchased the goods or services reviewed. Should this be added to the specific prohibitions that are unfair in all circumstances? It is envisaged that this will make it easier for the CMA to enforce the law. Competition should then be on an even footing by restraining the ‘industry’ that thrives on creating and selling fake reviews, as well as protecting consumers from being misled by them.
Government is also consulting on whether to add a third banned practice to “Schedule 1 of the CPRs to prohibit the commercial practice of traders offering or advertising to submit, commission or facilitate fake reviews.”
“Preventing online exploitation of consumer behaviour”
“The CMA’s market study into online platforms and digital advertising found evidence of the use of defaults and of deceptive or manipulative practices called ‘dark patterns’ which exploit consumer behaviour to influence choice. In many cases, firms may design their systems in ways which benefit consumers’ interests. However, firms can also manipulate the way in which options are presented to nudge or push consumers towards certain choices which benefit the firm rather than the consumer.”
Government believes that consumers should be able to make their own choices and that this is important for competition in all sectors. It is considering strengthening the law so that it is easier for enforcement agencies such as the CMA to take action against particular exploitative designs that feature on some websites. Government wants to “champion” ‘fairness by design’ principles with businesses on how online transactions are presented to consumers.
“‘Drip pricing’ refers to a situation where a consumer is advertised a price for goods, services, or digital content, but then finds that additional fees and charges have been added to the price before the transaction can be completed (i.e., once they proceed to the online ‘basket’ to complete the transaction). When these additional fees and charges are not optional and the sale cannot proceed without their addition, these are required under the CPRs to be signalled to the consumer from the outset, so that they can make an informed decision before attempting the transaction.”
“Similarly, search results on a trader’s website that are influenced by third parties paying to have their goods, services, or digital content feature more prominently should be clearly identified to the consumer as advertisements where this is the case. This is to provide transparency to the consumer over where rankings are paid for. Government is seeking evidence on whether either or both of these practices are problematic and whether there is a role for government and regulators to address them.”
Helen Dewdney The Complaining Cow responses to the consultation Download