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All trusted trader schemes that host
online customer reviews
From: Jon Riley
Project Director
11 February 2016
Dear Sir or Madam,
CMA advisory letter
This is an advisory letter from the Competition and Markets Authority (CMA) to
trusted trader schemes that host online customer reviews, comments or feedback
(‘reviews’) about their traders.
In June 2015, the CMA published a report on online reviews and endorsements,
following a call for information. The report raised concerns about the potential for
review sites’ practices to distort the picture presented to consumers. After publishing
our report we have worked with a number of review sites, including a number of
trusted trader schemes, to agree changes to the way that they check and present
reviews.
We are writing to encourage you to:
review your business models, processes and practices in relation to reviews;
and
consider, in consultation with legal advisers as appropriate, whether you need
to make any changes to your business to ensure that you are complying with
the law.
In the attachment to this letter, we provide our views on how the Consumer
Protection from Unfair Trading Regulations 2008 (CPRs) are likely to apply to trusted
trader schemes that host reviews. For the avoidance of doubt, we have not
specifically investigated nor formed a view as to whether your business is in breach
of the law.
If you have any general queries about this letter, please reply by email to
2
Yours faithfully
Jon Riley
Project Director
Competition and Markets Authority
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Attachment: CMA advisory letter to trusted trader schemes that
host online customer reviews
The Consumer Protection from Unfair Trading Regulations 2008
1
1. The commercial practices of trusted trader schemes fall within the scope of
the CPRs. Businesses may breach the prohibitions in the CPRs where, for
example, they mislead consumers
2
or engage in practices that contravene the
requirements of professional diligence (meaning honest market practice and
good faith).
3
Enforcers such as the CMA or Trading Standards Services can
take civil or criminal enforcement action in the courts in respect of CPRs
breaches.
2. In our report on online reviews and endorsements published in June 2015, we
set out at paragraphs 4.40 and 4.41 our views on what review sites should do
to help ensure that they comply with the CPRs in terms of collection,
moderation and publication of reviews. We also published a 60 second
summary setting out our expectations for review sites and the businesses
listed on them.
4
After undertaking further work with a number of trusted trader
schemes, we are now able to offer additional advice which we consider will
help trusted trader schemes to comply with the law.
5
Our advice to you
6
3. The CMA expects trusted trader schemes to do the following:
(a) Ensure that moderation and verification processes
7
do not have a
built-in bias that distorts the overall picture presented by reviews in
a way that might mislead consumers.
1
See the guidance on the CPRs.
2
Regulations 5 and 6. For there to be a breach, the commercial practice must cause or be likely to cause the
average consumer to take a decision they would not have taken otherwise.
3
Regulation 3(3). For there to be a breach, the commercial practice must materially distort or be likely to
materially distort the economic behaviour of the average consumer with regard to the product.
4
Online reviews and endorsements: advice for businesses.
5
We have also published a new 60 second summary and an infographic that can both be found on the case
page. These look specifically at the DOs and DON’Ts for review sites to ensure they give consumers the full
picture.
6
We have set out our views on the CPRs to help businesses to comply with their legal obligations. Ultimately,
however, only the courts can decide whether or not a commercial practice is unfair within the meaning of the
CPRs. This letter should not be regarded as a substitute for, or definitive interpretation of, the CPRs and should
be read in conjunction with them. It does not cover every situation or practice in which a breach of the CPRs may
occur.
7
Moderation involves checks that ensure content complies with the review site’s rules (eg no swearing, no
personal names, no advertising). Verification involves checks to verify that the reviewer was a genuine customer
of the trader. Moderation and verification checks may cover all reviews or only some of them.
4
Where some reviews are subject to more rigorous checks than others (for
instance, where negative reviews are held to a different standard or a far
greater percentage of them are verified than positive reviews), this has
the potential to distort the overall picture presented to consumers. Trusted
trader sites should consider whether their moderation and verification
processes are liable to create such distortions and, if they do, modify their
procedures.
We also note that some sites may collect reviews through card-based
feedback forms that are handed out to customers by scheme members.
Such processes may be vulnerable to abuse by traders that choose to
submit fake positive reviews or hand out forms to selected customers
only.
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Trusted trader schemes should therefore take a risk-based
approach in determining the level of scrutiny necessary, taking into
account the method of collection used.
They should also ensure that their moderation and verification policies are
clearly and prominently explained to consumers, eg in clearly labelled
FAQs that can be easily accessed and viewed on their websites.
(b) Ensure that mediation or dispute resolution processes do not distort
the overall picture in a way that might mislead consumers, or cause
unreasonable delays before publication of the original review.
Trusted trader schemes’ mediation and dispute resolution services may
lead to a good outcome for unhappy customers who may have their
concerns resolved after leaving a negative review. However, if a
reviewers’ initial experiences (ie a problem with a trader) are not
published (or where there is a significant delay before they are published),
other consumers will not be able to distinguish between the traders who
always get the job right first time and those that frequently need to fix
things later.
In the context of online reviews, the CMA does not regard mediation and
dispute resolution processes to be a problem in and of themselves,
provided they:
do not cause an unreasonable delay before reviews are published;
8
Note that such practices may put the trusted trader in breach of the CPRs.
5
are clearly, prominently and unambiguously explained to site users,
eg in clearly labelled FAQs that can be easily accessed and viewed
on the scheme’s website; and
are not used to withhold genuine, relevant and lawful feedback, or
parts of it, from publication. Where traders fix problems, it should be
for reviewers to decide what comments and ratings they want
published. Trusted trader schemes should provide options, but not try
to affect reviewers’ decisions, for example by trying to persuade them
to withdraw or amend their original feedback.
Trusted trader schemes should consider whether their mediation and
dispute resolution processes are liable to create distortions to the overall
review picture. If they do, trusted trader schemes should modify them.
They should also ensure that their policies are clearly and prominently
explained to consumers.
(c) Ensure that onscreen messages explaining that a review’s
publication has been withheld or is pending do not mislead
consumers.
The CMA does not regard the use of a ‘publication withheld’ message to
be a problem in and of itself, provided:
the trusted trader site is satisfied that the review has failed to comply
with its lawful policy or rules on what can be published;
the message itself does not mislead a reader about why the review, or
part of it, has not been published (for example, saying the review has
failed to meet the content standards when in fact it has met them);
and
the use and meaning of the message is clearly and prominently
explained to site users.
Similarly, the use of a ‘review pending’ messages may not be a problem,
provided its meaning is clearly explained to site users and clear and
unambiguous wording is used to accurately explain why publication has
been delayed. Further, there should not be an unreasonable delay before
reviews are published.
(d) Have an appropriate complaints procedure in place, where a
consumer wishes to complain about a scheme member.
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Trusted trader schemes should have a complaints procedure that is
clearly and prominently advertised to consumers. They should also take
steps to investigate complaints. It should be made clear to consumers that
making a complaint is separate and distinct from submitting an online
review.
Consumers should be free to choose whether they submit their comments
about a trader through the reviews channel (for publication) or the
complaints channel (specifically for the trusted trader scheme’s attention),
or both.
(e) Have an appropriate policy and process to handle threats of legal
action for defamation.
Trusted trader sites should consider including, within their rules on
content standards, an explanation of what they consider to be
‘defamatory’ content and therefore not publishable. Reviewers will then be
clear, from the start, about what content will not be accepted.
The CMA takes the view that, where a trader uses legal threats against a
review site to get genuine, relevant and lawful negative comments
withdrawn, this trader’s practice is likely to be unlawful.
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It is an absolute defence to a defamation claim to show that a statement is
true. Review sites should also consider the applicability of section 5 of the
Defamation Act 2013 (‘the website operator’s defence’) when weighing up
defamation risk.
10
However, we would strongly advise review sites to take
independent legal advice on this area of law.
9
This is likely to be a generally unfair commercial practice under regulation 3(3) CPRs.
10
Where an action is brought or threatened in England and Wales against a website operator in respect of a
statement posted on the website, it may be a defence for the operator to show that it did not post that statement
itself. Where the person who posts the statement is identifiable (ie the claimant has enough information to enable
it to bring proceedings against that person), section 5 may provide a complete defence. For more information see
Ministry of Justice (2014), Complaints about defamatory material posted on websites: Guidance on Section 5 of
the Defamation Act 2013 and Regulations.
