Is this the end for TripAdvisor and Checkatrade?

Published by Mark King on 26 February 2015.
Last updated on 26 February 2015

Checkatrade and tripadvisor

The Competitions & Markets Authority is to launch a probe into online review websites to address "potential concerns" with the information presented to consumers.

Its concerns centre around the "trustworthiness or impartiality of information in some reviews and endorsements that is being provided to consumers", with most reviews left by anonymous website users.

The rise of review websites such as TripAdvisor (which rates hotels and restaurants), Checkatrade (which rates tradespeople such as plumbers and builders) and even the likes of Amazon.co.uk, where people review the products for sale, has been phenomenal.

Spats

It has led to a wealth of information being available to consumers, but has also led to high-profile spats between companies and consumers, as well as accusations of bribery - with hotels accused of offering free rooms in return for positive reviews.

In November, it was reported that a hotel in Blackpool had charged a couple £100 extra after they left a poor review on TripAdvisor, while a hostel owner in Glasgow called one guest a "retard" after she also left a negative TripAdvisor review.

In June 2014, a national newspaper questioned Checkatrade's credibility after finding many consumers were being ripped off by tradespeople that had received sterling reviews on the website.

Many businesses have also claimed online reviews are unfair. Two high-profile chefs in Ireland have thrown "Certificates of Excellence" issued by TripAdvisor in the bin, because they claim anonymous reviews on the site cannot be trusted.

The CMA wants to investigate whether businesses are carrying out practices "that have the potential to mislead shoppers"; whether reviews "have the potential to distort consumers' decision making"; and whether reviews cause harm to businesses.

It will look at blogs, social media, specialist review sites, trusted trader sites, retail platforms and retailers' own websites; as well as the role the media and search engines play in directing people towards the reviews.

A powerful force

Nisha Arora, CMA Senior Director, Consumer, said: "The information contained in online reviews and endorsements can be a powerful force in the hands of consumers. Informed consumers make better decisions, driving competition on price and quality.

"Businesses have always known that 'word of mouth' is one of the most important factors for potential customers; what online reviews and blogs do is to provide a greatly amplified version of this. However, for this sector to work well it is important that this information is genuine, relevant and trustworthy.

Depending on what information the CMA gathers, it could choose to launch a market study covering this area, ask the industry itself to self-regulate, begin consumer enforcement action against firms; or pursue government legislation to have certain practices outlawed.

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