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Government Implements New Rules to Combat Fake Reviews on Ecommerce Platforms

Customer reviews and ratings greatly influence what people buy online. However, it has been found that some sellers trick their targeted audience by paying for fake reviews to boost their ratings and sales matrices.

To tackle the rising issue of fake customer reviews and exaggerated ratings on ecommerce platforms, the Union government is gearing up to apply an Indian Standards code. This initiative follows an increase in complaints from online shoppers, disclosed by consumer affairs secretary Nidhi Khare.

At a meeting led by Khare with big ecommerce players like Amazon and Flipkart, they talked about how fake reviews hurt the trust people have in online shopping sites.

A report by Mordor Intelligence states that the eCommerce market of India is expected to reach USD 112.93 billion in 2024 and the number may hit USD 299.01 billion by 2029. This shows the growth of the eCommerce market at a compound annual rate of 21.5%.

The new standard (IS 19000:2022) lays out clear responsibilities for both reviewers and review administrators. It mandates organizations to confirm the identity of review authors using specified methods.

Also, official data shows a significant increase in consumer complaints about ecommerce, jumping from 95,270 in 2018 to 4,44,034 in 2023. Khare stated that ecommerce platforms in India will have to create a written code of conduct and make sure it's followed by their management and staff.

Although platforms like Amazon have admitted the problem, fake reviews continue to be widespread. A study by US-based consulting firm Pattern found that even a small one-star increase in an Amazon rating can lead to a significant 26 percent increase in sales.

The Consumer Affairs Ministry says fake reviews mostly impact people in areas like hospitality, travel, and food & beverages, especially in the Indian context.
Draft quality control orders related to the new standard stress the importance of making sure real reviews are posted using strong processes for collecting, moderating, and publishing them.

Now, it would be interesting to see whether things will get changed with the implementation of new regulations, or if eCommerce sellers will keep relying on paid reviews to expand their sales.