CMA crack-down on unmarked sponsored content
The Competition and Markets Authority (CMA) publicly shamed five brands in February for suppressing negative reviews and not providing a ‘complete picture (for consumers) when making buying decisions’. The CMA renewed its commitment to ensure transparency in user generated content (UGC) in January, and is on the prowl for firms misrepresenting themselves on third-party sites using undeclared endorsements.
But it isn’t only brands that the CMA has targeted. It also has retailers on its radar and is investigating Sports Direct for allegedly blocking negative reviews. A Daily Mail investigation into Sports Direct’s use of reviews showed the retailer was rejecting negative remarks including a review left by the paper of a £10 Lee Cooper zip jumper which read: ‘The quality wasn’t as good as I had hoped.’
Meanwhile, the CMA is believed to be investigating other retailers and as such the likes of Amazon has taken things into its own hands pressing charges against independent sellers flooding its marketplace with fake review content.
In 2015, the CMA first investigated the impact of reviews and its findings were a wake-up call for brands. According to the Online Reviews and Endorsement Report 42% of consumers leave reviews, 95% of shoppers consulted reviews, and 6% of UK consumers made purchases after reading or watching reviews on blogs or vlogs.
It discovered that 80% of consumers believed reviews and 72% of blog or vlog audiences thought the reviewer and content creator was likely to be giving their honest opinion.
Sponsored posts that contain genuine opinion and declare they are advertorial content do not fall foul of the regulations. However, third-parties incentivised to review products without sponsorship labelling has become a dangerous trend, and it didn’t go unnoticed by the CMA.
It raised concerns that consumers won’t identify the difference between sponsored and unsponsored content when disclosure labelling is inadequate and that consumers will be encouraged to invest in products that do not meet their requirements or needs.
Interestingly, around 6% of consumers who bought something after reading a third-party review found the product was worse than promised. The CMA discovered that many brands are guilty of this practice, and it ruled that without exception, unmarked sponsored content is in breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and UK advertising codes.
With the CMA on the prowl, brands must take responsibility for collaborations with third parties such as bloggers and vloggers, and ensure they stay on the right side of the law.
Anne Marie Checcone Olsen, vice president of EMEA at PowerReviews