Journal of Consumer Policy

, Volume 36, Issue 2, pp 139–157

Taking Fake Online Consumer Reviews Seriously

ORIGINAL PAPER

DOI: 10.1007/s10603-012-9216-7

Cite this article as:
Malbon, J. J Consum Policy (2013) 36: 139. doi:10.1007/s10603-012-9216-7

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.

Keywords

Internet or online consumer market Consumer reviews Information asymmetry Regulatory systems Consumer protection 

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Law SchoolMonash UniversityClaytonAustralia

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