Answer By law4u team
User-generated reviews and ratings have become essential for online shopping, influencing consumer decisions. However, there has been growing concern about the manipulation of these reviews and ratings, with some e-commerce platforms allegedly hosting fake or biased reviews to mislead customers. Such practices can deceive consumers and distort fair competition. The Consumer Protection (E-Commerce) Rules, 2020, and other regulations hold platforms accountable for such manipulations. This raises the question of whether e-commerce platforms can be held liable for the fraudulent or manipulated reviews posted by users.
E-Commerce Companies' Accountability for Reviews and Ratings Manipulation
Role of E-Commerce Platforms in Managing Reviews
E-commerce platforms serve as intermediaries between consumers and sellers. While they may not always directly create or write the reviews, platforms are responsible for ensuring that the reviews and ratings published on their sites are authentic and not manipulated. As such, platforms are obligated to:
- Monitor reviews for any signs of manipulation, including fake or incentivized reviews.
- Implement measures to verify that reviews are genuine (e.g., verified purchase badges).
- Take action against sellers who may manipulate or fabricate reviews to mislead consumers.
Consumer Protection (E-Commerce) Rules, 2020
Under Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020, e-commerce platforms are required to ensure that the information provided on their platform (including reviews and ratings) is accurate and transparent. They must also ensure that:
- Reviews are not manipulated in any way that could mislead consumers about the quality, effectiveness, or safety of a product.
- Sellers are prohibited from posting fake reviews or influencing the review process to inflate ratings.
If an e-commerce platform allows or is complicit in fraudulent reviews or ratings, it could face penalties, including:
- Fines for failing to adhere to the rules.
- Regulatory investigations from authorities like the Consumer Protection Authority or the Competition Commission of India (CCI).
- Suspension or cancellation of licenses if non-compliance is severe.
Fake Reviews and Consumer Protection Laws
Manipulating product reviews by either paying for fake reviews or incentivizing users to post overly positive feedback is considered deceptive marketing under Section 2(1)(r) of the Consumer Protection Act, 2019. Platforms that knowingly or negligently allow the posting of fake reviews or fail to take down fraudulent reviews could be held legally responsible for deceptive practices.
Penalties and Consequences: Under the Consumer Protection Act, penalties for misleading advertising or reviews could range from fines to imprisonment, especially if the manipulations significantly harm consumer interests.
Obligations of E-Commerce Platforms
While e-commerce platforms are not directly responsible for user-generated content (since reviews are posted by consumers), they are legally obligated to:
- Implement safeguards to prevent manipulation of reviews, such as restricting paid reviews or reviews from individuals who have not genuinely purchased the product.
- Disclose if reviews are incentivized, as the Consumer Protection (E-Commerce) Rules require transparency about whether a review is paid for or incentivized.
- Take swift action against sellers who engage in review manipulation. This includes removing fake reviews, banning offending sellers, and notifying customers if any reviews have been found to be fraudulent.
Competition Law and Anti-Competitive Practices
Manipulating reviews and ratings to gain unfair competitive advantages can also constitute an anti-competitive practice under the Competition Act, 2002. The Competition Commission of India (CCI) can investigate and penalize e-commerce platforms that allow or facilitate deceptive practices, including the manipulation of ratings and reviews by sellers.
Impact on Fair Competition: If reviews are manipulated, it can distort the market by giving a false impression of the quality or popularity of products. This can harm consumers and competitors, particularly smaller sellers who are competing fairly.
Accountability for Sellers
While platforms must ensure transparency and take steps to avoid fake reviews, the primary responsibility for generating fake reviews typically lies with sellers or individuals who post the reviews. If a seller is found to be manipulating reviews, the e-commerce platform may:
- Delist the seller or suspend their account.
- Ban the posting of future reviews from that seller or any associated account.
How E-Commerce Companies Can Avoid Liability for Review Manipulation
Implement Robust Moderation Systems
E-commerce platforms should actively monitor user reviews for signs of manipulation, such as multiple reviews from the same IP address or reviews with similar language that appear to be coordinated. Artificial intelligence (AI) and machine learning can be used to detect suspicious patterns of activity.
Verified Purchase Label
To improve transparency, platforms should implement a verified purchase label on reviews. This helps ensure that the reviews are coming from customers who have actually purchased the product, making it harder for fake reviews to be passed off as legitimate.
Clear Disclosures for Sponsored Reviews
If a seller incentivizes reviews, platforms should require a clear disclosure that the review was paid for or incentivized. Consumers must be able to differentiate between organic feedback and compensated reviews.
Strict Enforcement of Policies
Platforms should enforce strict policies prohibiting sellers from posting fake reviews or offering incentives for positive feedback. This includes ensuring that sellers comply with anti-fraud policies and the Consumer Protection Act.
Example
Suppose a popular e-commerce platform lists a product that has high ratings and positive reviews, but several of those reviews are later found to be fraudulent—posted by individuals paid by the seller to boost the product’s image.
Steps the Platform Should Take:
Investigation
The platform conducts an investigation into the seller’s review practices, using automated tools to track suspicious review patterns.
Removal of Fake Reviews
The fraudulent reviews are promptly removed from the platform, and the seller is warned about their actions.
Action Against the Seller
If manipulation is severe, the seller’s account is suspended or permanently banned from the platform.
Communication to Consumers
A public statement is issued, notifying consumers that the reviews were fake and offering a refund or compensation for those affected by the deceptive practices.
Regulatory Reporting
If the platform failed to act quickly or failed to prevent the issue, they may be reported to the Consumer Protection Authority for investigation, and fines or penalties could be levied.
Conclusion
E-commerce platforms can be held accountable for user-generated reviews and ratings manipulation if they fail to implement adequate safeguards against fraudulent reviews or allow such practices to continue unchecked. Under the Consumer Protection (E-Commerce) Rules, 2020, platforms are obligated to ensure transparency, prevent deceptive practices, and address any manipulation of reviews. If a platform knowingly facilitates or ignores fake reviews, it could face legal action, including fines, penalties, and reputational damage. Therefore, e-commerce companies must actively monitor reviews, enforce policies against fraud, and provide clear disclosures to maintain trust and compliance with consumer protection laws.
