22 February 2017
Websites like TripAdvisor and Yelp have become the lifeblood of the hospitality industry. Amazon reviews can make or break a product. It’s even possible to find online critiques of your doctor or dentist.
Consumers are becoming increasingly reliant on online reviews from fellow shoppers, who aren’t necessarily experts on anything. In fact, one study found that 71% of shoppers read online reviews before making a purchase.
The economic impact is substantial: a Harvard Business School study found that a one-star increase in a Yelp rating leads to a 5-9% increase in revenues for that restaurant.
It should come as no surprise, then, to discover that some businesses are capitalizing on this trend, and not necessarily honestly. Companies are posting fake reviews of their services or products – or those of their competitors – and consumer confidence is taking the hit. Several recent studies have documented that 20-35% of online reviews are fake.
It’s all of a piece in this era of what US President Donald Trump calls “fake news.”
Regulating these activities is a challenge. Nevertheless, online retailers including Amazon and Alibaba, with review systems integral to their service, have been cracking down on fraudulent reviews in an attempt to deter phony critics.
Some turn to the courts. Last year, Amazon sued more than 1,000 defendants who offered to post fake reviews in exchange for compensation, while Alibaba sued Shatui.com for $310,000 for allegedly linking merchants with people willing to falsify purchases and write positive comments intended to drive sellers up the website’s rankings.
On a smaller scale, the Michelin-starred restaurant Loiseau Des Ducs in Dijon, France, won a lawsuit against a user of Pages Jaunes, a French review site, for posting a fake negative review of the restaurant — before it had even opened.
Yet, as with so many cyber-crimes, these efforts pale next to the magnitude of the problem.
As industries that rely heavily on online reviews scramble to find a solution to this epidemic – TripAdvisor, for example, toyed with the idea of requiring receipts to write reviews – some startups are tackling the issue head on.
Yotpo, a content marketing app, provides e-commerce sites and retail businesses with verified user-generated reviews. Shoppers can also now turn to FakeSpot, an online tool that analyzes online product reviews and determines their credibility.