India seeks to tackle fake reviews with guidelines for e-commerce platforms

Online reviews play a crucial role in e-commerce. PHOTO ILLUSTRATION: PEXELS

NEW DELHI - India, which has the world’s third-largest online shopper base, is cracking down on fake and deceptive reviews on the Internet by imposing a set of guidelines that apply to all e-commerce sites as well as other platforms publishing consumer reviews.

According to these rules released on Nov 21, platforms will have to appoint review administrators who will be tasked with filtering out fake and misleading reviews using automated tools as well as additional staff, if needed, to weed them out manually.

“The new standards are aimed at safeguarding the interests of customers by improving transparency, curbing fake reviews and ratings and maintaining the sanctity of online reviews,” Dr Rakesh Mohan Joshi, chairman of the Bureau of Indian Standards (BIS) committee on online reviews and ratings that drafted the regulations, told The Straits Times.

Online reviews play a crucial role in e-commerce, giving buyers access to information that is usually not disclosed by sellers in paid advertisements. But they also have engendered a growing problem of fake reviews.

According to the World Economic Forum, 4 per cent of all online reviews could be fake. Their consequences, however, are real, with the direct influence of these fraudulent reviews on global online spending in 2021 estimated at US$152 billion (S$206 billion) annually.

As per the new guidelines, reviewers will have to provide an e-mail address or a telephone number to enable the review administrator to contact them.

It is one of the several suggested ways through which a reviewer can be verified to be a real person, thereby reducing the number of bot-generated reviews.

Other checks proposed include verification using a captcha system or IP geolocation that determines the physical location of a web visitor.

“Every review that goes on the Internet should ideally be tied to an individual,” said Mr Sachin Taparia, a member of the government committee, adding that such checks will help platforms detect anomalies such as many positive reviews coming from a single IP address.

The new framework is crucial for the credibility of India’s booming e-commerce sector, which will be worth US$350 billion by 2030, as per a report from the India Brand Equity Foundation.

Some of the other problems being tackled include false positive reviews written by suppliers or sellers. The review administrator, for instance, “shall not knowingly” publish reviews paid for or written by individuals hired for this purpose. Checks mentioned to detect potentially suspicious behaviour by reviewers include analysing their frequency of reviews and history of contributions.

Any review written in lieu of an incentive, such as a reward coupon, will also have to be publicly marked as such. These paid reviews and their ratings must also not be factored into the overall rating of a product to eliminate any positive bias.

According to a June report by LocalCircles, a community-based social media platform, 65 per cent of e-commerce users surveyed said they had identified positive bias in online ratings.

The same survey also found that 58 per cent of users had their negative ratings and reviews not published online by platforms.

LocalCircles’ CEO Mr Taparia told ST the new rules will limit such a practice because review administrators will now have to respond to reviewers and give them a reason for not publishing their views.

“If that reason to me as a reviewer does not make sense, I can now escalate it to a consumer court as an unfair trade practice. I can do that now because this framework exists,” he said.

While the framework is voluntary for now, the government has said it could make the rules mandatory, if necessary, depending on how faithfully they are adopted.

Companies can choose to apply to the BIS, which drafted the rules in consultation with industry stakeholders, to get certified after adhering to the new framework.

Such a model is expected to enhance credibility of reviews on certified platforms, building consumer trust. But there have been concerns around whether smaller players will have the resources necessary to deploy the recommended checks.

Dr Joshi said that although the standards come with costs associated with the certification process and deployment of online monitoring tools, “the gains in terms of customer confidence and anticipated revenue would be far more than costs incurred”.

“Only time will tell how the industry reacts to the new regulations, but I’m confident the adoption of new standards will be a win-win for the industry and customers,” he added.

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