The Department of Consumer Affairs has issued new guidelines meant to put a stop to fake and misleading reviews for products bought online.
Whom does it apply to? Any organisation which publishes consumer reviews online, for instance:
E-Commerce platforms like Amazon and Flipkart
Food delivery apps including Zomato and Swiggy
Online travel booking sites such as MakeMyTrip and Goibibo
Third parties either contracted by the supplier or independently conducting reviews (MouthShut is one example)
It's not a must: "The standard will initially be voluntary for compliance by all e-commerce platforms," a government press release stated.
The guidelines will come into play starting 25 November.
They have been bundled under a new framework called "'IS 19000:2022' for Online Consumer Reviews – Principles and Requirement for their Collection, Moderation and Publication."
E-Commerce players which comply will be certified by the Bureau of Indian Standards.
The exact certification process is still being ironed out by the nation's standards body and we are likely to know more in the next 15 days.
Why it matters: Online shopping has really taken off due to the pandemic, and buyers often just have to go by customer reviews to make their decisions. But fake reviews can push customers to trust no one, indirectly hurting all businesses.
Going by the numbers, 65 percent of the 38,000 Indian consumers surveyed by LocalCircles this year said that product ratings were positively biased. Only 17 percent of the lot believe their eyes when it comes to online reviews.
The big picture: The government's plan is to start with making moderation voluntary and if that doesn't help, make the following requirements mandatory:
Set format: Reviews will have to include the publishing date and star rating.
Handlers: As per the guidelines, platforms have to appoint review administrators who will moderate reviews, either manually or using automated tools.
No redos: Consumers won't be allowed to edit their reviews or use foul language.
No second chances: Authors giving fraudulent reviews should be restricted from doing so in the future, the guidelines stated.
Trust, but verify: Authors submitting reviews online will be required to verify their identity. Platforms will verify consumers’ identity through their email addresses, phone numbers, IP addresses, or Captcha, the guidelines said.
Full disclosure of all paid consumer reviews of products and services offered on e-commerce platforms.
What they're saying: "We don’t want to bulldoze the industry…We will first seek voluntary compliance and then if the menace continues to grow, we will maybe make it mandatory in the future — depending on what happens,” Consumer Affairs Secretary Rohit Kumar Singh said at a press conference in New Delhi.
The DCA reportedly wants all e-commerce entities to adopt the framework as early as possible and get certified by BIS after adhering to the given standard.
“If they are not doing it and if they are indulging into a practice, which can then be termed as an unfair trading practice, then under the provisions of the Consumer Protection Act that deals with unfair trading practice or a consumer court can take penal action,” Singh added.
Chief Commissioner of the Central Consumer Protection Authority Nidhi Khare reportedly called purchased reviews "fraud reviews."
“We believe feedback mechanisms such as reviews are essential for consumer interest. We welcome the steps being taken by the government to create necessary standards and are obliged to be a part of the constituted committee,” Jaskiran Bedi, lead of public policy at Zomato, was quoted as saying by TechCrunch.
Behind the scenes: These guidelines are being rolled out after consultations were held with various stakeholders such as Zomato, Swiggy, Reliance Retail, Tata Sons, Amazon, Flipkart, Google, Meta, Meesho, Blinkit, and Zepto.
Industry bodies like CII, FICCI, ASSOCHAM, NASSCOM, ASCI, NRAI, and CAIT also made submissions.
Outside India, watchdogs such as the Federal Trade Commission in the US and the UK's Competition and Markets Authority (CMA) are contemplating regulation to address misleading reviews online.