No fake reviews

Review regulation for e-commerce platforms will help consumers

The pervasive issue of fake news and misinformation in the digital age has got the attention of policymakers across the world. The deluge of information in the digital format has fundamentally changed the way people consume news and information, and has made it difficult for individuals to discern between what is fake and what is authentic. At a time when the world is struggling to deal with fake news, another aspect of digitisation has come to haunt regulators and other stakeholders — the problem of fake online reviews on e-commerce websites. In this regard, the Department of Consumer Affairs (DCA) is planning to enforce quality standards and regulations for consumer reviews, and making compliance with such quality norms mandatory must be welcomed. E-commerce firms that participated in the stakeholder meeting with the DCA have also voiced their support for the government’s initiative.

The proposed quality control order (QCO) will likely prohibit e-commerce platforms from publishing consumer reviews online with biases and prejudices, editing reviews to alter their message, or preventing or discouraging negative review submissions. Regulations, once put in place, may also require identification and verification of the credentials of review writers. Besides, there are talks of implementing the IS 19000:2022 standard for online consumer reviews. Reviews play a crucial role in shaping consumers’ online shopping behaviour. Reading other people’s recommendations can be seen as the digital equivalent of testing and trying out products in physical stores. In this context, online reviews act as a substitute for knowing about the quality of products which cannot be physically inspected. By bridging information asymmetries between buyers and sellers and providing information that may not be otherwise disclosed, online reviews serve a valuable economic function. In fact, a global study shows that for websites displaying online reviews, conversion rates can increase markedly. A report by customer acquisition security vendor CHEQ suggests that online reviews influenced around $3.8 trillion of global e-commerce spending in 2021. Additionally, with opinion sharing moving to the internet and social-media platforms, businesses and online retailers are able to monitor consumers’ views about their products.

On the other side, false and sponsored reviews drive consumers towards making wrong purchase decisions, thereby distorting the market outcome. It also affects the credibility and trustworthiness of such digital platforms. Often, malicious users and bots are employed to create fake reviews to benefit a particular firm or seller. Search rank algorithms on the internet often depend on online reviews, thereby affecting product visibility and sales. This creates powerful incentives for sellers to manipulate their product rankings. In the medium term, however, such reviews often end up hurting sales and revenue figures since they usually push low-quality products. The number of complaints registered on the National Consumer Helpline regarding online fake reviews on e-commerce platforms, for instance, has seen a staggering 366 per cent increase from 2018 to 2023.

In this constant battle to detect and remove fake reviews and sustain consumer trust, it is imperative to leverage artificial intelligence (AI). By employing textual-analysis methods, AI can help identify fake reviews. Regulation must also be put in place regarding the publishing of paid reviews and demanding full disclosure of promotional content. The success of the proposed government regulations will ultimately depend on their implementation.