Amazon deletes about half of brokered reviews, one study found, but with an average lag of 100 days so sellers still benefit from the positive effects before they are removed.Jenny Kane/The Associated Press
Emily Osborne is a public policy researcher.
On Facebook META-Q, there’s a black market for fake Amazon AMZN-T reviews operating in plain sight. It supports a practice called review brokerage, in which Amazon sellers trade free products for fake five-star reviews through Facebook groups.
Review brokerage is harmful for consumers, honest sellers and platforms alike – everyone but the actors engaging in it. Competition regulators around the world are attempting to address these harms, with mixed success. And in Canada, the Competition Bureau’s ongoing investigation of the practice presents an important opportunity to take a strong stand against fake reviews and protect Canadian consumers.
The market’s existence is unsurprising given the power of reviews – particularly positive reviews – to influence consumer purchasing decisions. Indeed, Amazon sellers who purchased fake reviews saw short-term but significant boosts in their overall rankings, plus a corresponding increase in sales. What’s more surprising is that this market is still thriving after a decade of efforts to eradicate fake reviews from e-commerce platforms.
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Only verified buyers are allowed to write reviews on Amazon – the first curb in a series of restraints on review brokerage. However, it is easily circumvented by reviewers who actually purchase the product but then get a refund from the seller.
Once the fake reviews appear on the site, Amazon detects and removes them using a number of different strategies. The company has seen success here: One study found that it deletes about half of brokered reviews, though with an average lag of 100 days. The lag means sellers still benefit from the positive effects of the fake reviews before they are removed. Regardless, this success rate is not a passing grade. Amazon has also taken legal action against administrators running review brokerage groups on Facebook.
Facebook is even less effective at dealing with review brokerage groups, since it does not directly feel the consequences of fake reviews on its platform. And while Facebook does periodically remove the groups, they tend to pop back up again under different names. After an investigation by Britain’s competition watchdog, the Competition and Markets Authority (CMA), Facebook pledged to better tackle fake reviews, but a follow-up investigation found the practice persisted.
As for consumers, the growing number of fake reviews on e-commerce platforms is incredibly frustrating. Consumers are directly harmed by these reviews because they encourage the purchase of lower-quality products and decrease trust in reviews more broadly. This is a point of real bitterness given that reviews were first conceptualized as a mechanism for increasing trust. It was this consumer deception angle that attracted the Competition Bureau’s attention.
On the basis of the deceptive and misleading marketing provisions in the Competition Act, fake reviews can potentially be considered illegal in Canada, and several parties could be held liable. Indeed, the Competition Bureau has taken the view that Amazon may be liable and has been investigating the platform on the basis of these provisions since November, 2021.
Fake reviews are a notoriously slippery policy issue to tackle, but this is not to say there is no hope. In fact, a very promising solution has emerged out of a recent CMA investigation into Google, which saw the parties agreeing on a “name-and-shame” model. Under this model, Google is now required to display prominent consumer warnings on the pages of businesses caught purchasing fake reviews for its platform. While it is too early to tell if this will be effective, there is evidence to suggest that flagging fake reviews disincentivizes businesses from purchasing them and increases consumer trust.
The opportunity is clear: Once the investigation into Amazon has been concluded, the Competition Bureau can push for an outcome that mobilizes a name-and-shame model to punish Amazon sellers caught purchasing fake reviews. Such a solution has the potential to alleviate consumer distrust and reduce the number of fake reviews. An online shopping experience in which five-star reviews can be trusted may not be so far out of the realm of possibility.