Consumers must also be protected in online world

The internet has transformed many aspects of our society. Often, regulation and the law in general do not keep up with these developments, and there is a long period of lag before new laws are introduced or old laws are applied to a novel phenomenon.

Advertising has been revolutionised. Traditionally, it was mostly a one-way street, with traders effectively clamouring for the attention of customers by way of newspapers, television, radio or billboards. The expansion of social media, and in particular Twitter and Facebook, has meant there is now a more interactive relationship between companies and their customers.

However, in some ways, the spread of the internet has also reinvigorated the most potent form of traditional advertising; new forms of interaction mean that “word of mouth” is louder than ever. Many blogs post reviews of products which their operators have used, with the aim of guiding the purchasing decisions of readers.

Also influential are review sites, where consumers can rate and post feedback on products, with these scores being aggregated to form an overall picture of a product. Such reviews can be obtained not only for traditional products, such as books or holidays, but also for products that used to be masked by a certain degree of “in the know” mystique, such as computer parts or wine. Often, the less consumers know about a product, the more important these review sites are.

Online reviews have real-world implications. Nowadays, most consumers will not make a significant purchase before searching online, and many use their smartphone to check ratings as they shop. Positive reviews can encourage others to purchase, while negative ones can go viral, causing untold reputational damage.

With so much at stake, it is no surprise that companies have sought to manipulate such sites. There exists in many people’s minds a false distinction between the internet and real life; behaviours considered immoral or even illegal in reality are excused in cyberspace.

Many bloggers, particularly on YouTube, have been paid to promote products without adequately disclosing same. There are also firms for hire which will shamelessly engage in "astroturfing": deliberately manipulating rating sites to make a product more popular through false reviews. At their core, these practices are designed to mislead consumers into believing a product to be widely regarded by those with experience of it and then buy it.

Elsewhere, there has been a backlash against such manipulations. Many sites use algorithms to try to catch such tampering. The US's Federal Trade Commission (FTC) has initiated prosecutions for deceptive practices. Amazon has lowered the weighting given to reviewers who know the author.

In the meantime, many Irish bloggers, in the absence of a specific code of practice, have adopted an honour-based policy of complete disclosure or voluntarily comply with UK practices.

To an extent, it can be argued that Irish law deals with these practices. The Consumer Protection Act 2007, giving effect to EU directive 2005/29/EC, contains provisions outlawing unfair, misleading, aggressive or “prohibited” commercial practices, including practices that involve traders posing as consumers.

It is possible these provisions can be shoehorned to apply to review manipulations, but the current lack of clarity stops action being taken. As a further example, as Irish law stands, an ad cannot masquerade as normal content; it must be marked as such; the Act does not exempt internet postings. However, the law is less clear where a blogger or reviewer has received compensation or complimentary items in order to generate a review, the content of which is not controlled by the giver.

Negative review

Such lack of clarity is unfair on the consumer. Even if items are not received on the understanding that only a positive review is permissible, there are significant pressures inherent in such arrangements. A reviewer who gives a negative review may find a company will not continue to request their reviews on other products; if word spreads, other companies may follow suit.

Common decency alone may make a reviewer reluctant to give a harsh review where they have received free gifts. Similarly, despite the introduction of the 2007 Act, no case has yet been taken or code promulgated to clarify that manipulating internet ratings using false data is an illegal commercial practice, even though such behaviour is designed to distort the purchasing decisions of consumers.

In England, legislation, codes of practice and official guides already exist to govern the disclosure of conflicts of interests online, allowing bloggers and site-owners to operate in a concrete and clearly navigable system of rules. Such rules also comfort consumers, allowing them to know the incentives that might influence the reviews they read.

Currently, such concrete guidance is lacking in Ireland. It is not certain to what extent reviews can be deemed advertisements or whether rules regarding misleading or prohibited commercial practices apply to online reviewers who receive incentives or companies who manipulate online ratings. Clarity is needed in the area; there is no merit or logic in forbidding practices in the solid world but allowing them to flourish online.

It could be argued there ought to be a higher obligation of disclosure online than in real life, as most websites give the strong impression of neutrality or of being impartial, increasing the chances that consumers could be misled.

As the internet continues to evolve we must be careful not to allow hard-won consumer protections to be undermined through inaction. Codes of practice must be regularly updated and test cases taken to ensure all operators know where they stand. Aggressive, prohibited or misleading commercial practices must remain illegal and discouraged.

After all, where a consumer has been misled into parting with their money for an inferior product, does it matter whether the deception occurred online or in real life?

Stephen Fitzpatrick BL is a practising barrister and legal advisor to WebEthics.eu