Avoiding “Fake Views” – CAP publishes guidance on testimonials and endorsements
What enforcement options are available against marketers who use fake reviews to promote their goods or services?
The Committee of Advertising Practice’s (CAP) guidance reminds marketers of the need to be proactive in ensuring that they do not use fake reviews, either directly or indirectly due to a failure to verify. Remember, incoming European legislation, in the form of the Omnibus Directive (due to land in 2022), is set to give regulators real teeth to the enforcement options available to them against those who engage in fake reviews.
The new guidance
CAP has published guidance on Testimonials and Endorsements and specifically why not to use “fake views”. The guidance contains seven common-sense steps towards compliance:
- Demonstrate they’re genuine: this is self-explanatory, but the ASA also advises retaining the contact details of the person featured for as long as the ad is used
- Obtain consent: there are limited exceptions to this rule (see CAP Code rule 3.48)
- Make sure they’re relevant: eg don’t use endorsements or testimonials in a way that misleads consumers as to the efficacy of a product (such as inaccurate before and after photos for weight loss products)
- Don’t be sad, use #ad: the ASA has produced a wealth of guidance around the use of appropriate marketing hashtags
- Avoid incentivising positive endorsements: this could take the form of either encouraging consumers to post positive reviews in such a way that breaches the code, or amending or deleting negative reviews to give a misleading positive impression;
- Be aware of restricted categories: for example, neither health professionals nor celebrities should be used to endorse medicines
- Ensure all testimonials and endorsements comply more generally.
Given the importance of consumer reviews to business success, and their use as a legitimate method of promoting products or services, this is one area where it could be tempting to artificially bolster reviews. In 2019, the CMA investigated this exact practice and its prevalence on large online platforms such as Facebook and eBay. Its finding was that there is a “thriving marketplace for fake and misleading online reviews”. The CMA also secured commitments from Instagram, Facebook and eBay to tackle the risk of fake reviews being bought and sold through their platforms.
The Omnibus Directive
CAP’s advice is a salient reminder for brands to get their customer review processes in place before new European legislation in the form of the “New Deal for Consumers” lands next year. This package of legislation is intended to enhance and modernise the EU’s consumer protection regime by increasing powers against non-compliant businesses and bringing regulations up to date for a modern, digital focussed market. Of relevance to the field of consumer reviews is the “Directive on better enforcement and modernisation of EU consumer protection rules”; more commonly known by its catchier title of the Omnibus Directive.
The Omnibus Directive seeks to increase transparency around consumer reviews. It will require traders to publicly provide information around how they have ensured that the consumer reviews they publish have been produced by verified product or service users. Further, the Omnibus Directive has expressly blacklisted certain activities, which will be added to the existing list of banned practices under the Unfair Commercial Practices Directive 2005. These include prohibitions on:
- the procurement and/or posting of false reviews
- the deletion of negative reviews to manipulate the consumer’s product perception
- the transferal of endorsements from one product to another
- claiming that consumer reviews are authentic when this has not been verified.
The concept behind this new legislation is to ensure that consumers are presented with the most accurate account possible and are not misled by marketers when purchasing goods or services online.
Member States must adopt the Omnibus Directive by 28 November 2021 and must apply the rules of the Directive by 28 May 2022 at the latest. Despite the UK no longer being bound to implement the Omnibus Directive following Brexit, businesses who market their products or services to EU based consumers will still be caught by its provisions and expected to comply. Further, the UK Government published the Green Paper “Modernising Consumer Markets” in early 2018. This broadly mimics the Omnibus Directive but currently the proposal is for a cap
on financial penalties of 10% of a firm’s worldwide turnover.
Why is this important?
Looking at the broader picture of developing European consumer protection legislation, the CAP guidance note is helpful. It gives clear guidance on how a good customer review process should run and is a great reminder about the importance of achieving compliance before the arrival of the Omnibus Directive next year.
Put another way, using the guidance to help get your review processes in shape now will pay dividends later when the Omnibus Directive lands with its GDPR-level fines for non- compliance. Member States have the power to assess the gravity of a breach and, in the most serious cases can issue a fine of up to 4% of the annual turnover of the marketer “in the Member State or Member States concerned” or €2,000,000 if this figure cannot be calculated. As mentioned, while the UK itself will not be bound by the Directive, organisations who target EU-based consumers will be.
Any practical tips?
The ASA has for a long time warned marketers that they should be prepared to substantiate review claims used in promotions, whether made by influencers or members of the public. This advice is more relevant now than ever before, with the Omnibus Directive now racing down the track towards us. Considering the substantial potential fines for those found to be in breach under the Directive, ensuring that reviews used to market goods and products are legitimate and verifiable is quickly becoming a critical area for all consumer brands to focus on.