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Fake Online Reviews: The CMA’s Crackdown and What It Means for Consumers
In today’s digital marketplace, online reviews significantly influence consumer decisions. However, the prevalence of fake online reviews undermines trust and distorts fair competition.
Recognising this, the UK’s Competition and Markets Authority (CMA) has intensified efforts to combat fraudulent reviews, ensuring consumers receive accurate information.
Ticketmaster Consumer Protection Case
The Ticketmaster consumer protection case has sparked a major investigation by the UK’s Competition and Markets Authority (CMA), focusing on whether the ticket-selling giant has breached consumer rights.
This case arose from concerns over how Ticketmaster manages ticket sales, including alleged issues of dynamic pricing, unclear fees, and high-pressure sales tactics. If proven, these practices may have cost consumers millions and potentially violated important consumer protection laws.
The CMA’s investigation seeks to hold Ticketmaster accountable if any wrongdoing has occurred. At The Competition Lawyers, we are closely monitoring this case to ensure that those affected are informed of their rights and understand how to claim compensation if Ticketmaster is found to be in breach of the law.
Social media endorsements – CMA investigations
For several years, the CMA has been investigating social media endorsements to make sure that vital competition and consumer laws in the UK and not being broken.
Given the prevalence of social media, particularly in respect of it being used for marketing and advertising these days, it is vital that people know when they are seeing advertisements and products and services being pushed for recompense by influences. There have been many questions as to whether it has been clear enough that people know they are being advertised to as opposed to simply being recommended a product, which is the real focus of the CMA investigation.
CMA investigates fake online reviews on Amazon and Google sites
The Competition and Markets Authority (CMA) previously announced that it had begun an investigation into potentially fake online reviews which may exist on major websites and online marketplaces. It is understood that there may be concerns that businesses are not doing enough to monitor and take down misleading reviews, and that some could be benefiting from them.
Since the birth of online shopping, consumers have been afforded a huge breadth of choice when buying products or services, and all in an easy way. However, the internet also comes with risks for consumers, with many scammers and disreputable businesses trying to take advantage of the faceless nature of online shopping, hiding behind a screen as they attempt to convince unsuspecting consumers to make purchases.
The existence of fake online reviews is one of the major downsides to online shopping, posing a difficulty for consumers as authenticity can often be hard to assess accurately. It is, therefore, important that businesses appropriately oversee online reviews and remove the fake ones, or they could be unfairly profiting from the deception of customers.
Most favoured nation clause example: ComparetheMarket fined £17.8m
Last year, the Competition and Markets Authority (CMA) published the details of its full decision having fined ComparetheMarket £17.8m for reportedly breaching competition law. The investigation that had been concluded by the UK’s competition regulator led to the finding that the famous price comparison website was said to have broken the law by including a most favoured nation clause in some of the contracts it had with home insurance providers.
Over the course of December 2015-December 2017, ComparetheMarket is said to have used the clause to retain its domination of the comparison website market. The knock-on effect may have been the prevention of healthy growth of its competitors and possibly restricting customers from finding better deals on their home insurance.
Designed to empower consumers to find bargains in a crowded and confusing market, price comparison websites should be on the side of their users. This is why it was concerning that ComparetheMarket had been restricting competition seemingly for their own gain. The enforcement action taken by the CMA hopefully helped to restore competitiveness in the digital price comparison market, and is a real example of where the most favoured nation clause can lead to problems for competition law.
Final report published by CMA on funerals competition investigation
The CMA has finally published their concluding report on the funerals competition investigation which has been ongoing for several years, after it began in June 2018. Revealed to the public in mid-December, the report set out a series of suggested “sunlight remedies” to be applied in the funerals market sector.
These remedies are designed to empower consumers further when it comes to selecting funeral services, and to ensure that the sector remains under scrutiny following the investigation. The Remedies Implementation timetable was also published as of 8th January 2021, which set a deadline for implementing remedial action by 17th June 2021.
While there has been no action taken or fines issued as a result of this investigation so far, the CMA’s concerns for the funeral industry remain significant. As believers in fair competition, it is important that regulators work hard to make sure that business practices are fair for companies and customers. We believe that the thorough investigation has demonstrated strong support for the rights of the consumer in this industry.
Suspected breach of consumer protection law on secondary ticketing websites
There has been a suspected breach of consumer protection law on secondary ticketing websites that the Competition Markets Authority (CMA) has been investigating.
After the original review of secondary ticketing websites involving StubHub, GET ME IN! and Seatwave in 2018, the CMA is further investigating the compliance of some after alleged concerns about compliance with UK consumer law.
The CMA review ‘hidden advertising’ by Instagram influencers
The Competition and Markets Authority (CMA) has launched an investigation into hidden advertising by Instagram influencers, according to the Guardian.
It has been alleged that some influencers on social media platform Instagram have been posting content that is paid-for and sponsored by brands, advertising their products, without informing their audience. The problem of reportedly hidden advertising is a huge concern for the CMA, and they have said more needs to be done by the owners of social media platforms to tackle the problem.
It is a requirement for Instagram influencers to mark their posts with #AD or #advert and make it clear they have been sponsored by a specific brand or organisation. If they do not, they could violate the UK consumer protection law and potentially be misleading customers.
CMA finds anti-competitive practices in Digital pianos, digital keyboards and guitars sector
On 17 April 2018, the Competition Markets Authority (CMA) began a formal investigation into suspected anti-competitive practices in the musical instrument industry.
The CMA reportedly had reasonable grounds to suspect Yamaha of a competition law infringement. Yamaha was thought to be involved in anti-competitive practices and/or concerted agreements with at least one UK seller.
Given the value of this growing market sector, this is an important investigation for the CMA to have undertaken.
Booking hotels online: CMA continues to monitor practices and behaviour
The Competition and Markets Authority (CMA) continues to monitor pricing practices and behaviours for booking hotels online.
Since the completion of their investigations in 2015 into the sector, they have been actively engaged in monitoring developments. As an important sector to keep track of, their work – and that of their European competition counterparts – is clearly important.
Here is some information about the CMA’s latest publication of their work in this sector, and a brief background of the preceding events.