UK opens investigation into Amazon and Google over fake reviews

The CMA said the two companies may have breached consumer protection law.

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A picture shows the Amazon logo at the entrance area of the Amazon logistics centre in Lauwin-Planque, northern France, on April 16, 2020. - Amazon France said on April 16, 2020, it did not know when it would reopen its distribution centres, shuttered after a court ordered it to limit deliveries to essential goods pending a review of anti-coronavirus safety measures for its staff. (Photo by DENIS CHARLET / AFP) (Photo by DENIS CHARLET/AFP via Getty Images)
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After opening cases against Facebook and Google, the UK's competition regulator is now taking on another Big Tech company. The Competition and Markets Authority (CMA) has launched a fresh probe into Amazon and Google to assess if they are protecting shoppers from fake reviews. The move follows the CMA's initiation of an inquiry last May that raised concerns over the companies' handling of fake or misleading reviews on their respective sites. 

At the time, the regulator did not specify which websites it was investigating. Instead, it said that it was looking into issues including suspicious behavior, such as a single user posting multiple reviews for an unlikely range of products or services. The CMA also examined if businesses were combining reviews for products in an effort to manipulate their ranking and how sites were dealing with the shady practice of remuneration for reviews. This type of behavior is illegal under UK consumer protection law, with the CMA responsible for enforcing the rules.

Amazon and Google respectively wield enormous power over e-commerce and online search. Last year, Amazon's annual net sales grew 38 percent to $386 billion as people took to shopping online during the pandemic. While Google majorly revamped its Shopping feature in 2019 with new additions including price tracking and visual search. It followed that by recently making its Shopping search listings mostly free for merchants.

But, the two Big Tech rivals have also faced regulatory blowback over their alleged abuses of power. As part of an antitrust ruling, the EU handed Google a $2.7 billion fine in 2017 for giving prominence to its own shopping comparison service in results while downgrading rivals. EU regulators are also currently probing Amazon's use of third-party seller data to boost its own products.

As part of a landmark case in 2019, the US Federal Trade Commission successfully secured a settlement from Cure Encapsulations, Inc. over its payments to a third-party website to write five-star Amazon reviews for a weight-loss supplement.

There is also a precedent in the UK for this type of fake review case which could indicate the outcome for Google and Amazon. The CMA previously pushed eBay, Facebook and its subsidiary Instagram to clamp down on fraudulent reviews after finding that they were prone to them. As a result, all three companies agreed to take down the identified content, along with additional fake reviews, and to implement new safeguards. Under additional pressure from the CMA, Facebook eventually removed more than 16,000 groups that were trading fake reviews.

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