Issue of fake online reviews on e-commerce websites

Source: The post issue of fake online reviews on e-commerce websites has been created, based on the article “No fake reviews-Review regulation for e-commerce platforms will help consumers” published in “Business standard” on 22nd May 2024.

UPSC Syllabus Topic: GS Paper 2-governance-e-governance

Context: The article discusses the issue of fake online reviews on e-commerce websites. The Department of Consumer Affairs plans to enforce quality standards for reviews. E-commerce firms support this initiative. Implementing regulations and using AI can help detect and remove fake reviews. Issue of fake online reviews on e-commerce websites

For detailed information on framework for safeguarding consumer from fake reviews in e–commerce read this article here

What impact do online reviews have?

1. Online reviews shape consumer behavior significantly, acting as a digital form of trying out products in stores. They address information asymmetry between buyers and sellers by offering insights into product quality.
2. Conversion rates on websites that display consumer reviews have been shown to increase markedly.
3. According to a report by customer acquisition security vendor CHEQ, online reviews influenced about $3.8 trillion of global e-commerce spending in 2021.
4. The authenticity of reviews impacts the trust and credibility of e-commerce platforms, influencing consumer choices and market outcomes.

What are the issues with online reviews?

1. Fake and sponsored reviews mislead consumers, pushing them towards incorrect purchase decisions, which distort market outcomes.
2. The use of malicious bots and users to generate fake reviews benefits specific sellers or firms at the expense of others.
3. The number of complaints about fake reviews on e-commerce platforms registered with the National Consumer Helpline has dramatically increased by 366% from 2018 to 2023.
4. Misleading reviews harm the credibility and trustworthiness of digital platforms, affecting their reputation among consumers.
5. Search algorithms that rely heavily on reviews can be manipulated, impacting product visibility and sales negatively.

What are the proposed solutions?

Enforcing Quality Standards: The Department of Consumer Affairs plans to implement quality standards for online reviews, as mentioned in the discussions of new regulations.

Prohibiting Biased Reviews: The proposed quality control order will likely ban e-commerce platforms from publishing biased reviews, editing reviews to change their message, or discouraging negative reviews.

Verifying Reviewers: Regulations will require the identification and verification of review writers’ credentials to ensure authenticity.

Leveraging AI: Artificial intelligence is suggested to help identify fake reviews using textual analysis methods, improving the detection and removal of misleading content.

Question for practice:

Discuss the impact of fake online reviews on e-commerce platforms and the proposed solutions to address this issue.