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Customer review and rankings e-commerce

Legal Aspects Of Customer Reviews/Search Rankings

Reading customer reviews and comparing rankings of suppliers are now an increasingly important part of the buying decision for online products and services. According to statista.comnearly 70 percent of online shoppers typically read between one and six customer reviews before making a purchasing decision.[1]

However, fake reviews are becoming an issue. According to a study conducted by https://uberall.com/en-gb at the end of 2020, Google which is the top business review site in the US had a fake review rate of almost 11%. See further at https://uberall.com/en-gb/resources/blog/how-big-a-problem-are-fake-reviews.

In the European Union (EU) regulators are taking customers reviews and rankings seriously and the new Omnibus Directive (EU 2019/2161) which came into force in November 2021 and amends the Unfair Commercial Practices Directive (2005/29/EC) now imposes significant new obligations that e-commerce businesses must comply with.

Rankings

E-Commerce businesses must inform their customers of the criteria that determines the rankings of products offered to customers when a customer does a search. This includes describing which parameters are most important for the ranking. This information must be disclosed in a way that is easily accessible from the search results page.

Customer Reviews

E-Commerce businesses that display customer reviews or endorsements should inform their customers whether they have a process in place to ensure that the review is from an actual customer who has purchased or used the product or service.

This information includes telling customers how checks are made, whether all reviews are posted (negative and positive), and whether such reviews have been sponsored or paid for.

It will be considered to be an unfair commercial practice to tell customers that the reviews are from actual customers if no checks were made to verify this.

It is also an unfair commercial practice for e-commerce businesses to publish their own ‘fake reviews’ or to manipulate reviews to make them misleading. Examples given by the EU regulators include only publishing positive reviews and deleting negative reviews or linking a review with different but related content.

Fines

Potential fines for serious unfair commercial practices are now stiff similar to the General Data Protection Regulation (GDPR). E-Commerce businesses can now be fined up to 4% of their annual turnover in the EU member state or states where the infringement took place. To avoid the risk of fines e-commerce businesses should be transparent to their customers about their process for customer reviews and their criteria for search rankings.

[1] See https://www.statista.com/statistics/1020836/share-of-shoppers-reading-reviews-before-purchase/

blank Kelly Logan

Founder and Managing Partner

kelly.logan@loganpartners.com

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