Review needed – Govt should address consumer complaints, not monitor product reviews

Source: The post is based on the article “Review needed – Govt should address consumer complaints, not monitor product reviews” published in the Business Standard on 24th November 2022.

Syllabus: GS – 3 – changes in industrial policy and their effects on industrial growth.

Relevance: About monitoring online consumer reviews.

News: The Department of Consumer Affairs has unveiled the new standard – Indian Standard (IS) 19000:2022 on “Online Consumer Reviews” and Ratings. The framework aims to safeguard and protect consumer interest from fake and deceptive reviews in e-commerce.

What are the key features of the framework for monitoring online consumer reviews?

What are the advantages of the framework for monitoring online consumer reviews?

Ensure neutral review: A retail channel or product manufacturer can add fake reviews praising the channel, or product, to influence consumers favourably. Equally, a rival channel can put out fake reviews criticising a product or channel to generate a negative impression. The framework will curb such reviews.

Encourages creation of Open Network for Digital Commerce (ONDC): Most e-commerce platforms operating in India are marketplaces offering an array of brands of various companies, and these are sold and orders serviced via different retail channels. Many e-marketing concerns offer services to generate positive reviews, alongside giving search engine optimisation and similar services.

So, neutral reviews will give valuable feedback to potential consumers by offering them the information required to choose between competing products, and between competing fulfilment channels.

What are the challenges associated with monitoring online consumer reviews?

The online framework is difficult to enforce because,

-The framework involves the government machinery moderating an activity that should ideally be left to the market.

-If reviews are shut down by the framework, both customers and platforms will lose a valuable channel for feedback.

-It is not really possible for a framework to judge if a reviewer is honest or not. The old principle of “buyer beware” should apply in such cases.

What should be done to safeguard and protect consumer interests?

Role of market forces: Market forces will sort out the fake from the genuine on their platforms. They will do this by allowing many reviews and simultaneously improving the ability to weed out the fakes are more useful than trying to over-regulate reviews.

Role of government: There are many laws protecting consumer rights and guarding people against false advertising. Consumers can seek redress under these laws and in consumer court. So, the regulatory focus should be on ensuring fast redressal of consumer complaints instead of monitoring them.