The e-commerce sector is set to touch $350 billion by 2030, according to Invest India.

This growth is fuelled by the trust established between sellers and consumers.

Crucially, reviews and ratings are instrumental in fostering product trust.

Unfortunately, fake reviews just like spurious marketing are on the rise and this can undermine consumer trust. Review brokers manipulate reviews and ratings to achieve financial gain, creating an underground economy that misleads consumers and affects the credibility of genuine sellers and platforms.

Fake reviews and ratings have the potential to dramatically diminish the sales of the online businesses. To tackle this issue, global e-commerce companies have implemented advanced technologies and expert investigators to identify and counter fake or abusive reviews before they impact their business.

For instance, Google’s search algorithm has been updated with the aim to penalise affiliate websites that produce unverified reviews and ‘best lists’ without physically examining products. Similarly, Amazon strictly prohibits fake reviews and invested more than $1.2 billion and employed over 15,000 people — including machine learning scientists, software developers, and expert investigators — dedicated to protecting customers, brands, selling partners, and our store, from counterfeit, fraud, and other forms of abuse. However, people still find a way to bypass these measures.

Regulatory moves

Globally regulators have adopted mechanisms to restrict review brokers from deceiving customers. The Bureau of Indian Standards (BIS) in tandem with the Ministry of Consumer Affairs (MoCA) launched the ‘Indian Standard (IS) 19000:2022 - Online Consumer Reviews – Principles and Requirements for their Collection, Moderation and Publication’ to address the concerns of fake reviews.

But to make the measures more powerful and effective, the BIS needs to acknowledge the presence of review brokers and recommend punitive measures against these perpetrators.

Another major pain point is that the risk to loss ratio for review brokers responsible for review abuse is limited, making it an ineffective deterrent.

The framework aims to overhaul e-commerce platforms but raises concerns about transparency and disclosure of proprietary algorithms. Requiring businesses to reveal critical intellectual property is legally untenable and risks enabling review brokers. India’s low ranking in the International Intellectual Property Index underscores the need for a balanced approach that protects consumers and supports e-commerce businesses’ intellectual property.

The standards will also impact the UI/UX design of e-commerce platforms, affecting the user experience. Additionally, marketplaces must modify systems and implement mechanisms to verify the authenticity of customer reviews, which poses difficulties for smaller platforms.

In conclusion, the regulatory approach that is needed for online businesses which is in nascent stages of growth in the country is far different from the proposed standards.

To cure a headache, one does not chop the head. Permanently weeding out fake reviews across retail, travel, and other sectors will require greater public-private collaboration including the regulatory bodies, affected companies, social media sites, and law enforcement, all focused on a goal of greater consumer protection.

Encouraging voluntary standards which the larger entities have adopted is equally important.

The writer is an Advocate at Madras High Court

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