Although it is extremely difficult to quantify the real incidence of fake reviews, it is estimated that they range between 20 and 30% of the total reviews published excluding reviews directly filtered and rejected by platforms (Hunt 2015, p. 7, Kaitlin 2013, p. 365; Barish 2018, p. 833).Footnote 12 We are therefore faced with a widespread practice, with high potential for misinforming the users and distorting the competition in the market.Footnote 13 Fake reviews are detrimental to consumers, because they influence surreptitiously the consumers' decision making by falsifying the digital reputation of products and services (Short 2013, pp. 448–450). Likewise, they are prejudicial to fair competition in the market. Positive fake reviews give the praised product unfair competitive advantages. In contrast, negative fake reviews hurl an inaccurate or false accusation at the competitor's goods or services (Cardoso et al. 2018, p. 106).Footnote 14 Moreover, negative fake reviews potentially mislead competitors, who can make business decisions based on fraudulent opinions of fictitious customers, without knowing that such feedback is being manipulated by a competitor (Martens and Maalej 2019, p. 30).Footnote 15 Fake reviews also harm the online platforms that host them, since they reduce the credibility of their rating systems and consequently, their business model (Narciso 2017, p. 4; Ranchordás 2018, p. 135; He 2021, p. 31). Thus, fake reviews can be detrimental to the development of e-commerce, leading to vicious cycles of consumer dissatisfaction and defamation among competitors (Barish 2018, p. 833). Finally, some authors highlight that even the positive fake reviews can be harmful, because eventually consumers' suspicions would-be aroused, to a detrimental effect on the trader's sales thereafter (Zhuang et al. 2018, p. 26).
Whilst the deception in covert advertising lies in the way the message is presented, misleading advertising is deceptive in the substance of the message, which is confusing, imprecise, or false. In most cases, fake reviews violate the principle of truthfulness, since they usually overrate the virtues of the product they are trying to promote or disproportionately and falsely criticise the characteristics of the product they are trying to demote. In any case, some fake reviews may not constitute a form of misleading advertising, e.g. a fake review that limits itself to reflect unbiased and accurate characteristics of a product, or another that conveys a reasonable and well-balanced opinion.
In comparison, in the US, the honour of the traders can be defended through defamation actions, in accordance with the regulations of each state. As a rule, a trade libel action requires a plaintiff to show a written defamatory factual statement concerning the plaintiff, publication to a third-party, fault, falsity of the defamatory statement; and special damages or per se actionability. Usually, per se defamation includes statements that tend to injure another in his trade, business, or profession.Footnote 32
Fourth, the enforcement mechanisms provided under European and American regulations are in practice not working sufficiently well to eradicate fake reviews. This is demonstrated by the enormous imbalance between the widespread phenomenon of fake reviews and the few existing decisions sanctioning them. Despite clearly establishing the illegality of fake reviews, both European and American Advertising and Consumer Law appear to be weak method of control.
E.g. California Civil Code §§ 45 to 47.
Statement of Commissioner Rohit Chopra joined by commissioner Rebecca Kelly Slaughter, In the Matter of Sunday Riley, 21.10.2019. In their statement, the commissioners point out: "Today's proposed settlement includes no redress, no disgorgement of ill-gotten gains, no notice to consumers, and no admission of wrongdoing. Sunday Riley and its CEO have clearly broken the law, and the Commission has ordered that they not break the law again. Unfortunately, the proposed settlement is unlikely to deter other would-be wrongdoers. (...) The proposed resolution of this matter suggests that even the narrow subset of wrongdoers who are caught and attract law enforcement scrutiny will face minimal sanctions. (...) This settlement sends the wrong message to the marketplace. Dishonest firms may come to conclude that posting fake reviews is a viable strategy, given the proposed outcome here".
Seaton v. TripAdvisor, LLC, 728 F.3d 592 (6th Cir. 2013).
Figures have been collected from FTC, CMA and AGCM 2018 Annual Reports, which can be found on their websites: FTC: https://www.ftc.gov; CMA: https://www.gov.uk/government/organisations/competition-and-markets-authority; AGCM: https://www.agcm.it.
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