Taking Fake Online Consumer Reviews Seriously
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.
KeywordsInternet or online consumer market Consumer reviews Information asymmetry Regulatory systems Consumer protection
The author is grateful for the assistance of Joel Gory in conducting focus group interviews mentioned in this article and for writing up summaries of the interviews. He is also grateful for the financial assistance for this project from the Monash Law School.
- Ashton, K. (2012). The not so secret business of fake Yelp reviews. Daily Deal Media 14 February. www.dailydealmedia.com/657the-not-so-secret-business-of-fake-yelp-reviews/.
- Becher, S., & Zarsky, T. (2008). E-contract doctrine 2.0: Standard form contracting in the age of online user participation. Michigan Telecommunications and Technology Law Review, 14, 303–66.Google Scholar
- Calliess, G-P. (2007). Transnational consumer law: Co-regulation of B2C-E-Commerce. Comparative Research in Law and Political Economy Research Paper 3, pp. 1–54.Google Scholar
- US Census Bureau. (2012). Statistical abstract. Washington, DC.Google Scholar
- Centre for Retail Research. (2012). Newark, Nottinghamshire, UK http://www.retailresearch.org/onlineretailing.php.
- Chu, W., Choi, B., & Song, M. (2005). The role of on-line retailer brand and infomediary reputation in increasing consumer purchase intention international journal of electronic commerce. International Journal of Electronic Commerce, 9, 115–127.Google Scholar
- Cole, R. (2011). Fake review optimization—how black hat masters beat the travel system. http://www.tnooz.com/2011/11/15/news/fake-review-optimization-how-black-hat-masters-beat-the-travel-system.
- Danescu-Niculescu-Mizil, C., Kossinets, G., Kleinberg, J., & Lee, L. (2009). How opinions are received by online communities: A case study on amazon.com helpfulness votes. World Wide Web 2009 Conference, Madrid, Spain. April 20–24.Google Scholar
- Del Riego, A. (2009). Digest comment—context for the net: A defense of the FTC’s new blogging guidelines. JOLT Digest, an online companion to the Harvard Journal of Law and Technology, December 19, 2009. http://jolt.law.harvard.edu/digest/telecommunications/digest-comment-context-for-the-net-a-defense-of-the-ftc%E2%80%99s-new-blogging-guidelines.
- Digitalmarketinglab. (2010). http://digitalmarketinglab.com.au/index.php/2010/07/18/end-of-financial-year-performance-%E2%80%93-digital-style.
- European Parliament, Directorate General for Internal Policies, Policy Department A. (2010). Misleading advertising on the Internet. IP/A/IMCO/ST/2010-05.Google Scholar
- Flanagin, A., Metzger M., Pure R., & Markov A. (2011). User-generated ratings and the evaluation of credibility and product quality in ecommerce transactions. Proceedings of the 44th Hawaii International Conference on System Sciences.Google Scholar
- Forrest, E., & Cao, Y. (2010). Opinions, recommendations and endorsements: The new regulatory framework for social media. Journal of Business and Policy Research, 5, 88–99.Google Scholar
- Gibbs, A. (1997). Focus groups. Department of Sociology, University of Surrey. Research Update No.19, 1997. http://sru.soc.surrey.ac.uk/SRU19.html.
- Gunningham, N., & Grabosky, P. (1998). Smart regulation. Oxford: Clarendon.Google Scholar
- Krueger, R. (1994). Focus group: a practical guide for applied research (2nd ed.). Thousand Oaks: Sage.Google Scholar
- Kwon, O., & Sung, Y. (2012). The consumer-generated product review: Its effect on consumers and marketeers. In S. Posavac (Ed.), Cracking the Code: Leveraging consumer psychology to drive profitability (pp. 200–18). Armonk: Sharpe.Google Scholar
- Lankes, D. (2008). Trusting the Internet: New approaches to credibility tools. In M. Metzger & A. Flanagin (Eds.), Digital media, youth, and credibility (pp. 101–122). Cambridge: MIT.Google Scholar
- Lederer, S. (2010). History. In J. Sugarman & D. Sulmasy (Eds.), Methods in medical ethics (2nd ed., pp. 145–58). Washington, DC: Georgetown University Press.Google Scholar
- Lim, E-P., Nguyen, V-A., Jindal, N., Liu, B., & Lauw, H. (2010). Detecting product review spammers using rating behaviors. 19th ACM International Conference on Information and Knowledge Management, October 26–30, Toronto, Canada, pp. 393–948.Google Scholar
- McCracken, C. (2011). Businesses who commission fake reviews should worry about more than just illegality. Out-Law.com 21 June. http://www.out-law.com/page-12016.
- Miller, C. (2009). Company settles case of reviews it faked. New York Times July 14. http://www.nytimes.com/2009/07/15/technology/internet/15lift.html.
- Monbiot, G. (2011). The need to protect the Internet from ‘astroturfing’ grows ever more urgent. The Guardian Blog, 23 February. http://www.guardian.co.uk/environment/georgemonbiot/2011/feb/23/need-to-protect-internet-from-astroturfing.
- Mukherjee, A., Liu, B., & Glance, N. (2012). Spotting fake reviewer groups in consumer reviews. World Wide Web 2012—Session: Fraud and Bias in User Ratings Lyon, France, April 16–20.Google Scholar
- Nielsen blog, July 7, 2009. Global advertising: Consumers trust real friends and virtual strangers the most. http://blog.nielsen.com/nielsenwire/consumer/global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-most.
- Office of Fair Trading. (UK) (2010). Online targeting of advertising and prices: A market study. London: OFT.Google Scholar
- Office of Fair Trading. (UK) (2011). Consumer contracts. London: OFT.Google Scholar
- Office of Fair Trading. (UK) (2012). Investigation into inadequate disclosures in respect of affiliate marketing businesses. London: OFT.Google Scholar
- Ott M., Choi, Y., Cardie, C., & Hancock, J. (2011). Finding deceptive opinion spam by any stretch of the imagination. Proceedings of the 49th Annual Meeting of the Association for Computational Linguistics, Portland, Oregon, June 19–24, pp. 309–319.Google Scholar
- Patton, M. (1990). Qualitative evaluation and research methods (2nd ed.). London: Sage.Google Scholar
- Pinch T. and Kesler F. (2011). How aunt Ammy gets her free lunch: A study of the top-thousand customer reviewers at amazon.com. http://www.freelunch.me.
- Powell, R., & Single, H. (1996). Focus groups. International Journal for Quality in Health Care, 8, 499–504.Google Scholar
- Schwartz, J. (2006). Making the consumer watchdog’s bark as strong as its gripe: Complaint sites and the changing dynamic of the fair use defence. Albany Law Journal of Science and Technology, 16, 59–123.Google Scholar
- Scott, C. (2004a). Regulation in the age of governance: The rise of the post-regulatory state. In J. Jordana & D. Levi-Faur (Eds.), The politics of regulation: Institutions and regulatory reforms for the age of governance (pp. 145–174). Cheltenham: Edward Elgar.Google Scholar
- Speedy, B. (2012). Big jump in online retail sales growth, says NAB index. The Australian, 3 April. http://www.theaustralian.com.au/business/economics/big-jump-in-online-retail-sales-growth-says-nab-index/story-e6frg926-1226316902739.
- Tushnet, R. (2011). Towards symmetry in the law of branding. Fordham Intellectual Property, Media and Entertainment Law Journal, 21, 971–82.Google Scholar
- Wall Street Times. (4 April 2012). The big flaws in hotel rankings. http://online.wsj.com/article/SB10001424052702304072004577323874046732602.html.