Be ready to battle fake reviews, in-house lawyers told

As the Competition and Markets Authority prepares to flex greater powers that could see businesses fined up to 10% of global annual turnover, in-house lawyers have been advised to make sure their organisations are fully compliant with new rules banning fake reviews and 'drip pricing'.

The Digital Markets, Competition and Consumers Act, which received royal assent last year, requires businesses to take reasonable and proportionate steps to verify reviews and provide upfront information. 

To help in-house lawyers navigate the new landscape, law firm Farrer & Co explained the key changes during a consumer law update. Farrer & Co associate Andrew Rogers told the Gazette that to combat fake reviews, in-house lawyers should, as a first step, review their organisation’s current processes and procedures.

‘They will need to check whether their organisation carries out any banned practices - such as permitting concealed incentivised reviews or publishing reviews in a misleading way - and whether existing procedures are suitable to detect, investigate and respond to fake reviews,’ Rogers added.

As well as conducting regular risk assessments to inform what steps are required to prevent and remove fake reviews, Rogers said in-house lawyers should check if their organisation uses a third-party consumer review provider and how they combat fake reviews.

On drip pricing, associate Sufi Rahimi said in-house lawyers should work to ensure the headline price of products or services is clear and hidden costs do not emerge later in the purchasing journey. ‘The cost must be clearly disclosed upfront at the start of the booking flow. Any booking fees should be prominently displayed at the beginning of the booking process, so the consumer is able to calculate the total cost when they first see the product and the price together,’ Rahimi added.

From 6 April, the CMA will be able to take direct action against businesses without having to go to court. However, chief executive Sarah Cardell said that when it comes to fake reviews, the CMA will focus on supporting businesses in the first three months instead of enforcement. The CMA will only take enforcement action against drip pricing that clearly breaches the rules in line with guidance to be issued shortly.