March 6, 2022
On March 2, 2022, the Competition Bureau released new guidelines for consumers to recognize, reject and report false and misleading online reviews, which can violate the general civil or criminal misleading advertising provisions of the federal Competition Act (sections 74.01 and 52).
Online reviews have become commonplace in the digital economy as consumers look for reviews to guide their purchasing decisions and as businesses look to compete for online and bricks and mortar sales. In this regard, the Bureau notes that online consumer reviews may help consumers and businesses providing “unbiased” product information to help consumers “shop smart” and by rewarding businesses that provide a great product or service.
False or misleading online reviews can, however, contravene the Competition Act or provincial or territorial consumer protection legislation, including where negative reviews are not displayed, failing to disclose a material connection between a product and reviewer/influencer (see testimonials), unsubstantiated or untested performance claims and environmental claims regarding, for example, the recyclability of a product (sometimes referred to as greenwashing).
Some common influencer related issues include where an influencer has not actually used the product or service being promoted or the product claims do not reflect the influencer’s actual experience.
In its news guidelines, the Bureau provides the following tips to identify fake reviews: (i) watch out for a sudden increase in very positive reviews or a sudden dip in very bad reviews; (ii) look for new user profiles or reviews from users who have been providing positive feedback on select products or services over a short period of time; (iii) don’t necessarily trust reviews with an overly positive or very negative tones; (iv) beware of companies with only five-star reviews; and (v) watch for reviews that use the same language to describe how good or bad a product is. The Bureau also provides guidelines for consumers to reject fake reviews.
The Bureau’s new guidelines follows a novel online review case in the United States in which the Federal Trade Commission concluded that “fast fashion” brand Fashion Nova misled consumers by using a third-party management interface algorithm to automatically publish favourable customer reviews while withholding and concealing more negative customer reviews (see Fashion Nova case). The release also follows an announcement from the Bureau in March 2017, which references a third-party study that found that approximately one-third of all online consumer reviews are fake.
The Bureau’s new guidance is also consistent with its ongoing top deceptive marketing enforcement priorities which, in addition to false and misleading online reviews, also includes misleading price claims, drip pricing and false or misleading performance claims and savings claims.
For more information about misleading advertising, see: advertising law, misleading advertising, misleading advertising FAQs, performance claims and testimonials.
For some of our other posts about misleading reviews, see: United States Federal Trade Commission Enforcement in Novel Online Reviews Algorithm Case and Potential Implications for Canada, Testimonials and Endorsements in Advertising: Key Canadian Laws and Compliance Tips, Fake Endorsements Remain Canadian Competition Bureau Enforcement Priority, Competition Bureau’s Annual Internet Advertising Enforcement Sweep Focuses on False and Misleading Endorsements, Canada Increases Scrutiny of Online Paid Endorsements/Testimonials and New International Online Reviews and Endorsements Guidelines Give Practical Guidance to Marketers, Reflect Competition Bureau Policies.
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