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ACM calls for increased transparency in online reviews

One of the topics of the 2016-2017 Agenda of the Netherlands Authority for Consumers and Markets (ACM) is ‘Online consumers’. As part of this topic, ACM has carried out a study into online reviews. Online reviews are evaluations made by consumers about products or services. Since such reviews play an increasingly larger role in the decision-making process of consumers, it is critical that they are reliable. In its study, ACM has not found any indications of structural problems at this point. Considering the ever-increasing importance of online reviews, ACM does call on all parties that are involved in the aggregation, publication, and management of online reviews to increase transparency.

Over the next few months, ACM will focus on explaining the rules to companies, and on informing consumers. ACM has already done so with four large review websites. These websites publish reviews about products, services, or companies. These talks have already led to improvements with regard to transparency. Bernadette van Buchem, Director of ACM’s Consumer Department, explains: “As the importance of online reviews increases, so does the importance of reliability and transparency. ACM offers tips and information to companies on how they can best comply with the rules. We expect them to put that knowledge into practice. Otherwise, we may take enforcement actions.”

Outcomes of the consumer survey on online reviews

A survey held under consumers into the use of online reviews has revealed that:

  • Consumers  currently make use of online reviews to a substantial degree, and that usage is increasing; 
  • Consumers mainly use reviews when choosing electronic products, hotels, and restaurants;
  • Consumers do not solely base their decisions on online reviews in the orientation phase;
  • Consumers adopt a critical attitude when using online reviews, and are aware that such reviews can be subjective or fake;
  • Consumers rely on the assumption that review websites remove incorrect or false reviews;
  • Consumers easily leave out alternatives with negative reviews from their selections.

On ACM’s consumer information portal (in Dutch), consumers can find information on how they can determine the true value of online reviews, and on how to use them in their decision-making process.

Increased importance of online reviews for companies

Since their customers use online reviews in order to get an idea of their products or services, reviews are becoming an increasingly important marketing tool for companies. With online reviews, companies end up higher in online search results. The additional information in such reviews can help them attract more customers. Companies more and more often employ consumers to write reviews for a remuneration. Such reviews are basically advertisements. That is allowed, but this should be made clear to consumers.

Companies have a responsibility for presenting reviews in a balanced and fair manner. In order to ensure the reliability of online reviews in the future as well, ACM has reminded companies of the rules they should follow, such as:

  • Inform consumers on how reviews are aggregated and presented;
  • Treat positive and negative reviews equally as much as possible;
  • Publish reviews as soon as possible. This should be done, in any case, on the date of publication and not on the date of writing. If the review that was written earlier is published on a later date but contains the date of writing, it will not end up at the top of the search results, and would thus be difficult to find;
  • Be transparent about the circumstances in which the reviews were written, such as ‘reviewers were allowed to test this product for free’, ‘the reviewer received a remuneration for writing this review’, or ‘this review was edited after deliberation with the company’, etc.

Following discussions with ACM, four large review websites have stated that they will apply these rules from now on. ACM also expects trade organizations to play a large role in creating awareness of the rules among their members.

ACM currently sees no reason for taking any enforcement actions. If the companies in question fail to follow (or not sufficiently follow) the instructions given by ACM, ACM will then still be able to take action.

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