With reviews being a key marketing tool for many brands one of the key areas we have touched on is the enforcement powers the Consumer and Markets Authority will have against businesses who are engaging in banned practices in relation to online reviews.
Under the DMCC, writing, commissioning or publishing fake reviews (or undisclosed incentivised reviews) will always be considered unfair, whether that review is in relation to your own business or another business, and whether it is on your platform or a third-party platform.
How could it impact your franchise business?
Under the DMCC a fake review is defined as “a consumer review that purports to be, but is not, based on a person’s genuine experience”. This includes entirely fictitious reviews, but also incentivised reviews where such an incentive is not disclosed. The DMCC also prohibits publishing misleading reviews, or publishing review information in a misleading way. This change to the law has much more sweeping compliance consequences for franchise businesses which use customer reviews as part of marketing efforts. When highlighting behaviours that would be considered misleading in relation to publishing reviews, the CMA includes:
- Cherry picking reviews (for example: prominently displaying or utilising positive reviews – whilst diminishing the appearance of negative reviews);
- Suppressing fake reviews;
- Omitting information as to how reviews have been written;
- Review merging – using reviews from one product to promote another, separate, product;
- Publishing outdated genuine reviews; and
- Displaying aggregated review information in a star rating where effective measures have not been taken to identify false reviews.
Under the DMCC, the CMA has gained direct enforcement powers, alongside the power to dawn raid organisations for suspected breaches of consumer law, and fining powers of up to 10% group worldwide turnover.
In the context of franchising, it is important that the franchise network is compliant with these rules as although the franchisees will be separate entities, any action from the CMA where a franchisee falls foul of these rules is likely to have a reputational impact on the franchise brand as a whole.
What steps should you take?
The CMA is clear that it expects traders to take reasonable and proportionate steps in order to ensure compliance with the new provisions of the DMCC in relation to online reviews. How this will look for each business will vary based on their individual marketing and review gathering practices and internal resource. The CMA is clear that it expects organisations as an absolute minimum to have:
- A clear, published, policy on the prevention and removal of banned reviews and false or misleading consumer review information; and
- Conducted a risk assessment in relation to material appearing on their media and to take such further proactive steps to mitigate identified risks.
In addition, organisations may wish to consider:
- Integrating review compliance into existing web policies;
- Integrating compliance wording into communications with customers;
- Reviewing existing terms with third-party review sites;
- Reviewing existing measures and policies to ensure that reviews are genuine.
The consumer provisions of the DMCC came into force on 6 April 2025. The law does not provide for a leniency period and so organisations should urgently take steps to ensure that they are compliant with the requirements of the DMCC and related guidance in relation to online reviews.
Experience demonstrates that where the CMA gains new powers, it is quick to use them to make examples of non-compliant organisations, in order to incentivise compliance from other traders. We would therefore recommend acting fast. If you have any questions or require further information about this, please do not hesitate to contact us.
