Online reviews 'used as blackmail'
Businesses are ambushing rivals with fake reviews and customers are using the threat of online criticism to win discounts, research has found.
Allegations have been made of people "blackmailing" firms with poor reviews to get money off, the Competition and Markets Authority (CMA) said.
Review sites may leave negative commentary unpublished to allow firms to resolve complaints, the CMA added.
Consumers could be unaware that some endorsements in blogs were paid for.
The CMA has now launched an investigation into various companies, as the use of paid-for endorsements without a clear admission of payment may be unlawful.
"We are committed to ensuring that consumers' trust in these important information tools is maintained, and will take enforcement action where necessary to tackle unlawful practices," said Nisha Arora, senior director at the CMA.
"We have opened an investigation into businesses that may be paying for endorsements in blogs and other online articles where the payment may not have been made clear to readers."
The CMA found that 54% of UK adults used online reviews, and many found them valuable.
These were found on websites ranging from specialist review sites such as Tripadvisor and trusted trader schemes such as Checkatrade, to booking agents such as Expedia and retailers such as Amazon.
The competition authority estimated that £23bn a year of consumer spending was potentially influenced by online reviews.
However, it discovered cases which have been known as "astroturfing" - the practice of creating fake grass root reviews.
Among the potentially misleading cases, on unnamed sites, were:
- Businesses writing fake reviews of themselves to boost their ratings on review sites compared with rivals
- Firms writing or commissioning fake negative reviews to undermine rivals, for malicious reasons, or for personal gain
- Review sites cherry-picking positive reviews
- Sites allowing businesses to remedy negative reviews, that go unpublished, meaning a complete picture is not clear to review site users
Impartiality could be compromised by review sites' need to make money through subscriptions, click-throughs, or selling reputation management services to businesses.
"A review site may want to maximise its own commercial revenues from subscriptions, and may jeopardise this if it upsets business clients by publishing negative reviews," the CMA report said.
The authority also heard allegations of consumers using reviews to get money off.
"Consumers may be using the threat of a poor review to 'blackmail' businesses into providing some concession, such as a price discount," the report said.
A BBC investigation has revealed the global market for fake review writers, and the use of stolen identities to post reviews.
Ashley Booth Griffin, from New York, supposedly posted a positive review for a loan website, but in fact she was killed in a car crash seven years ago. The photo used in the review came from her memorial website.
"I think it is despicable," said her father Greg Booth. "They are simply attempting to dupe the public, to cheat and to lie."
The BBC also spoke to a student in Dhaka, Bangladesh, who was paid $5 (£3.15) to write a fake review.
The CMA also researched the trade in endorsements on blogs and online publications which are paid for by businesses.
"We have seen examples of suppliers paying bloggers sums of between £100 and £500 in return for a blog post about a product or service, and up to £50 for a pair of tweets," the report said.
"We have also heard of payment in the form of gifts, vouchers, tickets to events and, or, hospitality."
In some cases, the payment was made clear in the blog, but in others it was not. An investigation had now been launched into these cases.
Although the CMA did not name any of the companies under the spotlight, many review sites have been defending their processes.
Holiday review site, Trip Advisor said that it had automated, and individual, checks in place to spot suspicious patterns of behaviour. This tackled businesses aiming to boost their own rating, vandalise others, or optimise their position on the site.
"Trip Advisor has been developing and refining its fraud detection process for more than 15 years," the company said.
"We fight fraud aggressively and our systems and processes are extremely effective in protecting consumers from the small minority of people who try to cheat our system."
Kevin Byrne, from Checkatrade.com, told the BBC that most of their reviews came in handwritten.
He also said that reviewers "are vetted by sending a confirmation email" - so supplying a fake email when submitting an online review would not work.
A spokesman for consumer group Which? said: "The CMA was right to launch this investigation as consumers rely on reviews to make decisions, so it is critical that they are genuine.
"Retailers should be vigilant and try to root out bad practice on their sites, and consumers should check a number of difference sources, including genuinely independent experts like Which?."