WASHINGTON—Fraudulent online reviews, which deceive consumers and damage companies’ reputations, are a significant problem. While the public and private sector have taken some steps to address the proliferation of fake reviews, a new report from the Center for Data Innovation concludes that state and federal governments should strengthen their enforcement actions, partner with the private sector to develop best practices, and pass legislation to protect consumers from lawsuits when they leave honest reviews.
“The importance of online reviews has opened a new market for fake reviews that present a dishonest impression of companies, goods, and services,” said Morgan Stevens, a research assistant with the Center for Data Innovation, who authored the new report. “Companies may turn to employees or bad actors to fraudulently leave positive reviews to boost the image of their products, or negative reviews to discredit those of a competitor. These actions both hurt honest businesses and mislead consumers as to the quality of relevant goods and services.”
Previous research has found that the negative impact of fake reviews has grown over the years, likely influencing billions of dollars in consumer spending. The Center’s new report breaks down the types of fake reviews that proliferate as well as other sources of misrepresentation that impact the online marketplace, including the suppression of negative reviews, lawsuits over negative reviews, the harassment of customers, and payments to silence critics.
The Center calls on policymakers to take four steps to address fake reviews:
- The FTC and state attorneys general should combine their investigations and heighten enforcement actions against the actors pursuing or posting fraudulent reviews.
- The FTC should work with review websites, e-commerce sites, and consumer brands to develop best practices for preventing and detecting fake reviews.
- The FTC should work with the private sector to create best practices for social media companies to identify and remove fake reviews.
- Policymakers should enact legislation to protect consumers who leave honest reviews from lawsuits.
“Fake reviews can deceive consumers and inaccurately reflect the quality of businesses’ goods and services,” said Stevens. “To protect both consumers and businesses, state and federal policymakers should work with the private sector to identify and take enforcement actions against perpetrators of fake reviews and safeguard consumers’ ability to provide truthful feedback about their purchases.”