The CMA is investigating the non-disclosure of paid online endorsements
An inquiry has been opened by The Competition and Markets Authority (CMA) investigating the potential illegal activity concerning online reviews and endorsements across six sectors including beauty/male grooming.
During a call for information conducted by the CMA in February, the watchdog was alerted to instances of potentially misleading practices including fake reviews being posted on websites, negative reviews not being published and businesses paying for endorsements in blogs and other online articles without this being made clear to consumers – something P&G was pulled out for recently in relation to one of its sponsored videos (for more on this story, click here).
Following the initial probe, the CMA has now opened an investigation into the potential non-disclosure of paid online endorsements. The investigation uses the CMA’s consumer enforcement powers to look into a number of companies – the names of which it did not disclose.
In its report on the CMA’s call for information, published on 19 June, it noted: “While recognising the potential benefits of these tools, the CMA had also become aware of a number of concerns about the potential for reviews and endorsements to mislead consumers and distort their decisions. We were concerned that, if true, this could lead to detriment for both consumers and businesses.”
In the report it specifically acknowledged the confidence a consumer gains from endorsements in getting the best value out of a purchase, “for instance where the endorsement provides a ‘tutorial’ on how to use a beauty product”.
The investigation is being backed by different organisations and companies including Feefo, a closed review platform. Feefo provides a feedback service prompted on the receipt of a consumer’s transaction online ensuring the feedback is verified and trustworthy, according to the company.
Andrew Mabbutt, Feefo's CEO, said: “We have known about questionable tactics and practices from a large number of review platforms for a number of years, but it has been difficult to fight that alone. We welcome this report and hope it’s the start of an auditing process that will lead to the failure of platforms that allow anyone to post a review, without true verification or any accountability."