Fake Reviews And Pricing Under The DMCCA Spotlight (Podcast)

Transcript

Zoe Pearman: Hi everyone, I am Zoe Pearman, a Principal Associate in the Intellectual Property and Advertising Law Team here at Gowling WLG.  So the Advertising Team hosted our Advertising Law: A Year in Review Seminar back in January and as part of that I gave an update on the Digital Markets Competition and Consumers Act 2024.  At that point we were nine months on from the implementation of the key consumer law aspects. 

And then the purpose of this podcast is just to highlight some of the points that I discussed at the seminar.  If you would like to know any more of the detail or if you would like to discuss any of the issues that I raise, please do contact myself or Dan Smith. 

So, last year consumer law was pushed to the very top of many businesses' compliance agenda as most of the consumer law aspects of the DMCCA (the Digital Markets Competition and Consumers Act) came into force and while this Act largely repealed and restated the previous law on unfair commercial practices, it also added some important new requirements around, for example, fake reviews and drip pricing.  In addition to this new area of law it gave the Competition and Markets Authority (the CMA) some new powers.  The CMA now has the powers to directly investigate matters and to issue fines and enforcement notices without going to Court.  The levels of fines are pretty significant.  It can be up to £300,000 or 10% of annual global turnover, whichever is higher and that is in relation to the final infringement notices and then there is a sliding scale for other breaches.

This new enforcement regime of the CMA is intended to allow the CMA to take faster, more effective action and our understanding from the CMA is that while before a business that received enforcement action from the CMA might have expected to be able to have the opportunity to agree undertakings as a resolution, we now expect fines to become the norm and it certainly provides an increased deterrent in this area.  It should encourage business to take consumer law compliance even more seriously and place it on a similar footing to the likes of data protection or anti‑trust compliance.

We then talked about what has happened in these nine months since the DMCCA consumer law aspects came into force.  Firstly there has been a stream of guidance in the key areas of regulations, so drip pricing, fake reviews, but there has also been guidance on how to make your complaints to the CMA.  The guidance sends a clear message that the CMA wants to encourage a greater volume and well reasoned quality complaints and from talking to the CMA we know that they continue to be busy raising awareness and that as part of that awareness they are encouraging complaints from businesses as well as consumers and consumer groups.

In terms of action, the CMA has carried out a large sweep of over a hundred businesses focussing on the fake reviews and they are looking at whether or not the businesses that they have swept have a fake reviews policy in place and whether that policy outlines the respective businesses' approach towards incentivised reviews.  As part of that sweep, they found that more than half of the businesses that they looked at could be failing to comply with their guidance.  This may be because the business does not have a policy in place, it may be because the policy is unclear, incomplete or inaccessible. 

Then more recently, so in November of last year, attention turned to drip pricing with the CMA announcing the launch of a major consumer protection drive.  As part of that there was enforcement action against eight business against concerns over their price transparency and this covered a real range of business, both in terms of size and industry.  In addition to that, they sent advisory letters to a hundred more businesses expressing concerns about their price promotional practices and the CMA has also finalised its guidance on avoiding drip pricing and other issues with price transparency.  We are expecting an update on this soon.  The initial press release indicated that there could be an update in March so it is very much a "watch this space", but this action as a whole should come as a warning for any business that advertises prices to consumers whatever the product line. 

It is also worth just noting that as part of this major consumer protection drive, the CMA highlighted a number of sectors that they consider to be of particular concern.  That includes businesses working in the fashion sector, holidays, homeware, retail and parking, but even if you are not in one of the sectors that the CMA has specifically called out, there is still a need to review the guidance published by the CMA, take a look at your customer journey and review marketing assets for any risks.

There have been a couple of updates since the seminar in January.  The CMA continue to be very busy, but we have now seen the first fine issued by the CMA under its DMCCA powers.  The CMA imposed a penalty of £473,000 on a business that failed to respond to a request for information, so it was not a breach of consumer law per se, the CMA issued a request to do a little bit more digging and the business in question failed to respond to that request and has been fined in light of that.  They have also announced an investigation into a business' early cancellation fees and they are looking into that.

So that is kind of what has been done to date, but I am now going to look at a couple of the more specific changes that have been made by the DMCCA.  The first one of those is around fake reviews.  We discussed at the seminar how reviews are an increasingly popular means of consumer research.  I am sure most of us as consumers will look at the star rating or the reviews of a product before we make a purchase and it is very clear that reviews have a big impact on a consumer's decision making and that drove this need for further regulation.

So while I mentioned earlier that the DMCCA largely repealed and restated the existing consumer protection laws, this is an area of change and it introduced a new banned practice relating to reviews.  It is now automatically unfair and illegal for business or individuals to submit or commission fake reviews or conceal incentivised reviews,
to publish reviews or consumer review information in a misleading way, to offer services to procure banned reviews or to publish consumer reviews without taking reasonable and proportionate steps to prevent fake reviews.

I am just going to touch on a few other things that we spoke about at the seminar.  Looking at the first two banned practices, so the submission or commission of fake reviews or concealed incentivised reviews and publication in a misleading way, I briefly discussed a couple of the key terms, noting that the CMA guidance provides that a fake review is a consumer review that purports to be but is not based on a person's genuine experience.  It can be positive or negative, that does not matter, but a typical example is the use of bots to post positive reviews to improve a business' rating.  Consumer review information is information that is derived from or is influenced by consumer reviews, so that could be an aggregated star rating for example. 

I also flagged at the seminar that the more interesting area is around concealed incentivised reviews and this is where we are seeing a lot of questions from clients.  In brief it is not illegal or unfair to incentivise reviews, but that incentive must be disclosed.  So if you provide an incentive to anyone to give a review, that review must be clearly labelled as an incentivised review.  The DMCCA itself does not get into the formal labelling, but the CMA guidance is clear that the label must clearly identifiable, it must be clear to anyone engaging with the review and it must be labelled as an advert.  When we look at this against the background of the CMA and also the Advertising Standards Authority appearing to adopt #ad or another derivative of "advertising" as a kind of one size fits all solution to disclosures and this, in kind of potentially analogous PR influencer situations, we suspect that the lowest risk approach when labelling would be to use the word "ad" or some other derivative of "advertising", say that the review has been incentivised and ideally you would go on to explain that form of incentive.  We think that there is a need for the use of "ad" because that is the solution that the regulators tend to reach for.  We do expect and we have seen some marketing teams push back on this.  You maybe want to add a little bit more context to explain incentive to just try to soften the use of #ad and we would be happy to discuss any potential labelling that you are considering as a business.

Another area that I find interesting in the review space is that it is not just about the content of the review, it is also about the presentation of reviews and that can be equally misleading.  The CMA guidance talks about a number of different misleading presentations.  That could include supressing or cherry picking reviews, so only showing the positive reviews or hiding the bad ones.  It is quite common to go on to a website and you will see that there are five reviews, all of which are five stars, but then you go on and you look at the overall Trust Pilot score, for example, and it is three point something.  That practice of selecting only the favourable reviews to be presented on your website or highlighting positive ones when they do not necessarily reflect the experience being reported by reviewers overall, that is an example that is called out by the guidance as being problematic.  There therefore needs to be some manner of control to ensure that the reviews shown are representative and there will likely need to be some further information included as well, so we would recommend that you also include the overall average rating.

Another misleading practice is omitting information.  That would include failing to disclose that a review has been incentivised but also not disclosing if the reviewer has some kind of financial interest in the business or some other kind of commercial link to the business or the product that they are reviewing.  There is also catalogue abuse or review hijacking.  That is where you present a review of a different product that is related to the product that the consumer is considering.  This may include a review of one drink, for example, so one flavour which is posted on the product page of a different flavour.  It is not necessarily a no no, the guidance says that it may be appropriate to merge reviews in some circumstances, but only where the consumer's experience is likely to be materially the same so care really does need to be taken there.  Similarly with outdated reviews, if there has been a material change to the product or the service being reviewed, then the reviews may need to be updated.

It is then when we consider the misleading presentation in the context of consumer review information, so that is that aggregated review information, your aggregated star rating for example, that it gets a lot more complicated because that presentation of the consumer review information can easily be misleading.  For example, it would be misleading and therefore prohibited to display a star rating or a review count that is based on a number of reviews that have been aggregated, but that the aggregation itself fails to address the impact of fake reviews, so if you are pulling together an overall star rating, but do not remove reviews that have been identified as fake, then that would be misleading.  Similarly it is our view that including incentivised reviews in an aggregate star rating is likely to be misleading and we do not think that disclosures would be sufficient to resolve the misleading presentation.  This is a high risk area and the process for obtaining and presenting consumer review information needs to be considered carefully.

I skipped over the third banned practice at the seminar and I am going to skip over it again today and instead focus on the fourth requirement, the fourth banned practice, which is the requirement to take reasonable and proportionate steps to prevent fake reviews.

This element is interesting because it creates a positive obligation on businesses.  While the CMA acknowledges that there is unlikely to be a one size fits all solution, the guidance is clear that businesses will need to have a clear policy in place and will need to assess the risks of fake reviews appearing on their site, on their customer journey and take such further proactive steps as are reasonable and proportionate to address the issues identified.  The need for a policy is supported by the CMA sweep that I mentioned at the outset of this podcast.  That sweep focussed on whether the businesses swept had a reviews policy in place and whether that policy set out the position on incentivised reviews.  We think it is likely that the CMA will continue to ramp up enforcement action in this space following their relatively gentle first steps and we think that businesses should pay heed to the warnings.  They should consider how and where their marketing teams are using reviews and testimonials and make sure that they get a published policy in place. 

So that is the policy requirement and then the other element that is required by the CMA is to assess the risk.  Businesses should review their customer journey, essentially pretend that you are a customer and follow that journey through on your online platform and see how likely it is that customers and consumers may encounter banned reviews or also misleading consumer review information and they should identify appropriate measures to address any risk identified.  The CMA has indicated that at a minimum the measures to address the risk should include systems, processes and policies relating to detection, investigation and actions that you will take if a fake review is identified.  The action that you would need to take obviously will depend on how you are using reviews that we discussed briefly that we can get some feeling for the CMA's thinking and what steps and measures may be required if we look at the conclusions of its previous investigations, say for example its investigation against Google.  This action was concluded before the DMCCA, but it does give a bit of an indication of the CMA's likely approach.  If we look at the undertaking that Google was required to give following that investigation, Google must impose a rigorous approach to detecting and removing fake reviews so that that enables the rapid identification and investigation.  They must impose sanctions for rogue reviewers and there must be consequences for businesses that are found to be boosting their star rating by fake reviews and that should include adding warning alerts to the relevant businesses' profiles and there should also be an easy reporting mechanism so that consumers can quickly report concerning or suspicious reviews to Google.  Of course Google uses reviews more than most businesses, but we think it is important for businesses to reflect on the commitments that Google has given and consider whether their own practices need any changes.  It is clear that if businesses do not get a grip on this, they may find themselves on the receiving end of regulatory action.

Moving away from fake reviews, the next and final topic we discussed in the context of the DMCCA was around price transparency and drip pricing.  Drip pricing is a practice that I am sure we are all familiar with.  You go online, you look at a product, you see a headline price, but as you go through the journey to purchase, more and more fees get added on and drip pricing is expressly prohibited under the DMCCA.  The rules and guidance around price transparency are in place and applied to all invitations to purchase, which is pretty broadly defined and in essence where a trader gives information to consumers about a product and about the product's price, that will normally be considered an invitation to purchase and in such invitations, prices must not be misleading.  The price shown should be the total price and that should include any fees, taxes, charges or other payments that the consumer will have to incur if they are going to purchase the product. 

If because of the nature of the product, the price (or a part of it) cannot reasonably be calculated in advance, the invitation to purchase must include the part of the price that can be calculated and sufficient information that enables the consumer to do the calculation.  That information must be provided with as much prominence as the part of the total price which can be calculated in advance so this is likely going to mean that businesses will need to increase the prominence of optional charges. 

The most common question we get asked around this is around delivery charges, how must they be presented and the CMA guidance has a whole section on delivery charges and sets out its expectations pretty clearly.  For example, if a consumer cannot purchase a product without paying an additional charge to cover the cost of delivery, then that is a mandatory cost and it should be included in the total price.  By contrast, optional delivery charges are not required to form part of the total price and they may be included separately in the invitation to purchase, but note they must also still be included.  To be optional, the consumer must be able to purchase and receive the product without having to pay any cost for delivery, for example if you can collect the product in store for free.  Charges would not be optional simply because you offer a choice between several different paid delivery options, so if you have got standard or next day, that does not render the delivery cost optional.  If the customer must pay for delivery, then the total price must include the cheapest delivery option. 

The CMA also sets out its expectation around free delivery thresholds, so that is the situation where, for example, you get free shipping if you spend more than £40.  The CMA would expect you to include the full delivery fee in the total price until the consumer's basket of products reaches the spend threshold to qualify for the lower or free delivery charge and then at that point the total price should be adjusted to reflect that reduction.

Another situation that is discussed in the guidance is where you are online shopping for example, you would not expect the delivery charge to be included in the total price for every single product that you add to your basket because you are purchasing multiple products in one delivery.  In that situation, the CMA expects a business to provide you with the total price of the products in another way.  So they have a couple of examples here.  That may include providing the base price of the product and information about the delivery charge plus a clear and prominent rolling total for the order that updates as consumers add products to the basket.  The guidance talks about that could be done as a "floating basket" or a "sticky banner" which stays on screen as the customer scrolls up and down and updates in real time or another option would be a dynamic add to basket option.  This tells customers what the cost of adding an item to their basket would be, including any additional fees or discounts that would apply.  These are options that have been suggested by the CMA and are likely going to involve working with the IT team as it will likely require website development so it is something to definitely be thinking about and discussing with IT teams now.

Those were the main points that we discussed in January, but to summarise, doing nothing should not be an option.  Businesses which bury their head in the sand or are slow to address concerns are far more likely to be on the receiving end of action from the CMA.  There is a need to review the guidance that has been published by the CMA and review your customer journeys and your relevant marketing materials for any risks.  The review should not be limited simply to drip pricing or fake reviews, which are the two hot topics out of the DMCCA, but you should also consider checking compliance in other areas targeted by the CMA, for example the use of dark patterns.  These are essentially nudges in your online journey that push consumers to make decisions that they did not plan to make, or of course any green claims which is always a CMA hot topic. 

Compliance may not be super straightforward.  As discussed the CMA guidance on drip pricing in particular recommends several solutions which will likely require website development and costs associated with that.  You also need to make sure that you have a fake review policy in place and of course if you receive any notice or correspondence from the CMA, this should not be ignored.  As we have seen a failure to engage can result in pretty heavy fines.

Of course, as I mentioned at the outset, Dan Smith and I will be very happy to discuss any of the points raised or any other advertising or marketing concerns you may have.

Thank you.

END OF TRANSCRIPT

If you attended our ADVice seminar in January, you will have heard Zoe Pearman, a Principal Associate in our Intellectual Property and Advertising team, speak about consumer law following the Digital Markets Competition and Consumers Act (DMCCA).

The purpose of this podcast is to highlight some of the key points discussed, including the Competition and Markets Authority (CMA)'s new powers, how the CMA is using those expanded enforcement powers and key areas under regulatory scrutiny: fake and incentivised reviews to drip pricing and price transparency. The episode also offers some practical steps businesses should be taking now and offers a timely reminder that consumer law compliance can no longer be treated as a “nice to have”.

If you'd like to discuss any of the points raised or any other aspects of consumer law or the DMCCA, please do contact Dan Smith or Zoe Pearman.

This information is accurate as at the date of recording (19 March 2026). Legal and regulatory guidance may change, so we recommend checking the latest DMCCA developments and CMA enforcement actions.

Want a clearer picture of the key steps businesses should be taking now? Our article sets it out in full.

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.