Trustworthy versus fake reviews on online marketplaces and review platforms : time for the EU to regulate transparency of review systems?

Abstract

In today’s e-commerce environment, many consumers rely on online reviews from peers. They find these reviews nearly everywhere in the internet and trust former customers more than a trader’s own advertisement. The possibilities to get information about a trader’s reputation are limited online due to anonymity and distance. Over the last years, online reviews had become a powerful tool for the success of business. However, some traders started to boost their business by buying positive reviews from certain companies. Other traders tried to harm a competitor through false negative reviews. Some traders decided to use incentives in order to get more reviews. ‘Fake reviews’ had become an increasing problem. Therefore, platforms developed strategies in order to detect and remove them. Consumer organisations published guidelines for the handling of online reviews. Such voluntary codes of conduct and self-control are helpful but they are not sufficient because they are not binding. Thus, there is the need for clear legislation and enforcement in order to combat fake reviews. Some Member States tackled the challenges posed by fake reviews in their own way. Several courts in Germany delivered decisions in this context, whereas France adopted a law in 2016 which directly imposes transparency requirements on online platforms. The experiences of these two countries are instructive. Albeit Directive 2005/29/EC on Unfair commercial practices (‘UCPD’) tackles fake reviews, the provisions themselves do not explicitly mention them. The Commission’s guidance of 2016 refers to online reviews, but it is not legally binding. The EU’s ‘New Deal for Consumers’ introduced Directive (EU) 2019/2161 on better enforcement and modernisation of Union consumer protection rules. The new Directive explicitly addresses online reviews and amends the UCPD by introducing transparency requirements for review systems. This leads to more legal certainty for traders and consumers alike, although the new provisions are not detailed and may still allow room for further divergent practice among Member States implementing the said Directive.