Taking Fake Online Consumer Reviews Seriously

Abstract

Evidence discussed in this article indicates that consumers rely heavily upon consumer reviews when making decisions about which products and services to purchase online. Sellers and their marketeers are aware of this, and as a result, some of them succumb to the temptation to generate fake consumer reviews. This article argues that policymakers and regulators need to take fake reviews seriously. This is because they undermine a (potentially) effective and efficient mechanism for overcoming information asymmetry between online sellers and buyers. Consumer reviews also offer a powerful mechanism for regulating the marketplace. Sellers who sell sub-standard products or engage in sub-standard selling practices risk reputational damage. Genuine consumer reviews can therefore moderate bad seller behaviour and assist in improving the quality and efficiency of the marketplace. Although there are laws in many jurisdictions that prohibit misleading and deceptive conduct, detecting fake reviews is complex and difficult. This article proposes that one way of increasing the effectiveness of regulatory oversight is for regulators to add an “alliance approach” to their existing arsenal of regulatory systems and mechanisms.

Appendix

Focus Group Semi-structured Questions

Outline Contracting

• 1. Experiences with buying goods and services on the Internet:

  • Have you bought goods or services over the Internet?

  • Discuss what kinds of goods and services were purchased and when they were purchased (types of contracts: gym memberships, airline tickets, concert tickets, purchasing goods from eBay or other places, downloading music, movies and books, hire cars)

  • Discuss how frequently purchases are made using the Internet

  • Discuss which are the more popular of the websites and why

• 2. Good experiences with Internet purchasing

  • Discuss if purchases went well, what were the good experiences in terms of the value of the things you bought on the Internet—timeliness of delivery follow-up within complaint, etc.

• 3. Not so good experiences with Internet purchasing

  • Have you had any negative experiences with purchasing goods on the Internet?

    Discuss what those negative experiences might have been, e.g., any nasty surprises, that is, there were terms or policies of the supplier not what you expected? Examples, highly unexpected charges for returning a hire car late, significant exclusions in an insurance contract, unexpectedly difficult in getting any readdress, unexpectedly difficult to cancel or rollover contract; unexpected fees or charges; no easy way to resolve the dispute, or no means at all

  • Reactions to a bad experience

    Did it make you more cautious, and if so how; did it make you less likely to shop on Internet; did it make you less likely to shop around?

  • Did you tell your friends and family about the bad experiences? Had anyone already warned you about that particular site or supplier or brand? (the impact of teaching/learning?)

• 4. Saliency

  • Were there any conditions about buying the goods or services that you were particularly looking for when you went online—if so, what were they?

  • Were there any conditions that became important to you after you had bought the goods or services—what were they?

  • After asking whether they were looking for information on anything in particular, you could ask them whether that information was what they expected? If not, did that make them rethink the purchase? (gauging expectations vs. reality?)

• 5. Contract Issues

  • Were the goods/services of expected quality?

  • If they were not—what did you do about it?

  • From that experience—what would you do differently next time?

  • Was it easy/not easy to resolve any issues in dispute?

  • How did you deal with any issues in dispute?

• 6. Comparing online with real-world purchasing

  • Do you think it is more difficult online and off-line to understand what the terms and conditions are, what services or goods will be supplied, how any problems will be sorted out?

  • Ideally how would you like any issues you have any sorted out in the future?

  • Given your experiences, would you pay more for real-world services next time?

• 7. Terms and conditions

  • Have you ever read the terms and conditions before you click “I agree”?

  • If so, were there any terms you were looking for, and if so what were they?

  • If you didn’t read them—why not?

  • Given your past experience, particularly any bad experiences, what terms would you like highlighted or brought to your attention before you click “I agree”?

  • Can you recall any time when you have had a particular term drawn to your specific attention either online or by a person, e.g., cancellation policy; how did that make you feel about the particular provider and the service they were offering?

  • Would you like to be able to negotiate—or chose—certain terms?

  • If so, what would they be, and why?

• 8. Ideal website

  • If you could go to the ideal website for shopping—what would that site look like and what features would it have (ignore for the moment the types of consumer goods or services that are actually being sold through the website)?

• 9. Summing up

  • If you could pass on advice to others buying goods/services on the Internet, what particular advice would you offer them?

  • What would make you feel more comfortable in the future about the terms and conditions before you clicked “I agree”?