How platforms must adapt: key takeaways from CMA’s investigation into Amazon

The Competition and Markets Authority (CMA) recently announced that Amazon have made undertakings (promises) in relation to reviews.

The CMA also took the opportunity to announce that it was “actively sweeping” for reviews online in anticipation of the enforcement grace period on the consumer reviews provisions in The Digital Markets, Competition and Consumers Act (DMCCA), coming to an end.  

Amazon gave no less than 38 such undertakings, which in itself is an indication that the efforts required to comply with the rules on consumer reviews is not trivial. Amazon’s undertakings require it to take various measures to reduce the prevalence of fake reviews and ‘catalogue abuse’ (reviews for one product being applied to a different product) on its platforms.

Summary of the undertakings

1. Various risk management requirements. For example, not making any changes to a website’s review functionality without first assessing the risk to consumers, mitigating any such risks within 90 days and recording any mitigatory steps taken.
2. Implementing internal measures to respond to fake and misleading reviews in a timely way. For instance, taking particular care to ensure that reviews for products that Amazon endorses in some way (eg. through its “Amazon’s choice” label) are not fake or misleading.
3. Implementing reporting mechanisms to allow consumers and other third parties to easily report fake or misleading reviews (such as a button next to individual reviews). Other similar measures include:

• Providing ‘Trusted Flaggers’ (eg. the CMA and Trading Standards) with a mechanism to report reviewers or sellers and to investigate all such reports.
• Publishing educational materials for sellers about what sorts of reviews are acceptable.
• Mitigating the impact of ‘suspicious reviews’, ie. those that are deemed potentially fake or misleading, but where there is no conclusive proof to justify taking them down. Mitigations might include reducing the visibility of such reviews, or reducing the weight such reviews are given in the calculation of star rankings.

4. Sanctions for reviewers and sellers who are responsible for fake and misleading reviews. This might include banning a seller from Amazon. Amazon also agreed to: 

• Implement an appeals process for any sellers that are subject to sanctions of this kind.
• Remove reviews associated with a banned seller/reviewer (unless there is a legitimate reason not to).
• Keep a record of sanctions applied by reviewers and sellers for three years. 

5. Annually reviewing the effectiveness of the measures identified at 1-4 above and proactively rectifying any shortcomings.

6. Compliance reporting. For example:

• Keeping the CMA updated by producing an annual written statement explaining what Amazon is doing to comply with its undertakings.
• Rectifying any omissions identified by the CMA in Amazon’s compliance reporting within 30 days (or face enforcement action).
• Appointing a skilled senior employee to manage Amazon’s compliance reporting obligations. 

Comment

These undertakings were agreed to bring the investigation started in 2021 into Amazon to an end. So this enforcement is done under the old regime which allows the CMA to agree undertakings. Now that the DMCC has come into effect in addition to agreeing undertakings the CMA can also issue an enforcement notice backed by a fine of up to 10% of turnover. Which means that any new investigations into reviews compliance, particularly the new obligations under DMCC could result in direct financial penalties. Making compliance all the more important. Although the undertakings themselves are under the old regime it is likely they are somewhat indicative of what the CMA considers compliance in relation to reviews should look like going forward – at least for platforms. For more on the new obligations into relation to reviews please see our article available here.

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