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Evidence discussed in this article indicates that consumers rely heavily upon consumer reviews when making decisions about which products and services to purchase online. Sellers and their marketeers are aware of this, and as a result, some of them succumb to the temptation to generate fake consumer reviews. This article argues that policymakers and regulators need to take fake reviews seriously. This is because they undermine a (potentially) effective and efficient mechanism for overcoming information asymmetry between online sellers and buyers. Consumer reviews also offer a powerful mechanism for regulating the marketplace. Sellers who sell sub-standard products or engage in sub-standard selling practices risk reputational damage. Genuine consumer reviews can therefore moderate bad seller behaviour and assist in improving the quality and efficiency of the marketplace. Although there are laws in many jurisdictions that prohibit misleading and deceptive conduct, detecting fake reviews is complex and difficult. This article proposes that one way of increasing the effectiveness of regulatory oversight is for regulators to add an “alliance approach” to their existing arsenal of regulatory systems and mechanisms.
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Journal of Consumer Policy
Consumer Issues in Law, Economics and
Behavioural Sciences
ISSN 0168-7034
J Consum Policy
DOI 10.1007/s10603-012-9216-7
Taking Fake Online Consumer Reviews
Justin Malbon
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Taking Fake Online Consumer Reviews Seriously
Justin Malbon
Received: 13 September 2011 / Accepted: 27 November 2012
Springer Science+Business Media New York 2013
Abstract Evidence discussed in this article indicates that consumers rely heavily upon
consumer reviews when making decisions about which products and services to purchase
online. Sellers and their marketeers are aware of this, and as a result, some of them succumb
to the temptation to generate fake consumer reviews. This article argues that policymakers
and r egulators need to take fake reviews seriously. This is because they undermine a
(potentially) effective and efficient mechanism for overcoming information asymmetry
between online sellers and buyers. Consumer reviews also offer a powerful mechanism for
regulating the marketplace. Sellers who sell sub-standard products or engage in sub-standard
selling practices risk reputational damage. Genuine consumer reviews can therefore moder-
ate bad seller behaviour and assist in improving the quality and efficiency of the market-
place. Although there are laws in many jurisdictions that prohibit misleading and deceptive
conduct, detecting fake reviews is complex and difficult. This article proposes that one way
of increasing the effectiveness of regulatory oversight is for regulators to add an alliance
approach to their existing arsenal of regulatory systems and mechanisms.
Keywords Internet or online consumer market
Consumer reviews
Regulatory systems
Consumer protection
The genesis of this article was the authors curiosity about whether consumers use strategies
to protect them from being ripped off when buying products and services online, and if so
what those strategies are. There are a range of risks attenuating online p urchasing.
Consumers can just as easily buy products from sellers within their jurisdiction as from
those outside. Purchasing outside jurisdiction is particularly risky because of the consider-
able difficulties a consumer faces in enforcing their legal rights. Other risks include
purchasing goods that do not arrive, or receiving unwanted or defective goods. Physical
J Consum Policy
DOI 10.1007/s10603-012-9216-7
J. Malbon (*)
Law School, Monash University, Clayton 3800, Australia
Author's personal copy
products such as clothing, shoes, and furniture cannot be physically examined or tried on
before purchase, unless the online seller offers a no-cost or low-cost returns policy (Chu et
al. 2005, p. 116). Even then, a consumer is required to deal with the delays, costs, and
inconvenience of returning an unwanted, unsuitable, or defective product. The risks relative
to the real world are less pronounced in the case of electronic products such as music,
movies, ringtones, and computer games and programmes. Here, products can often be
sampled online prior to purchase. Additional risks confronting online consumers include
threats to their privacy and security, fraud, and immature legal protection mechanisms (Chu
et al. 2005, p. 116; Datta and Chatterjee 2008, p. 16; Flanagin et al. 2011, p. 1, 1).
Yet, despite the risks, it appears the rate of consumer complaints for online purchasing is
about the same as for real-world purchasing. The UK Office of Fair Trading, for instance,
undertook a comprehensive survey of 4000 consumers during 2010 and found that online
problems accounted for 4.6% of complaints, which compared well with the average of 5%
for all consumer contracts complaints (Office of Fair Trading 2011, para 2.10). The OFT
found that most problems resulted in zero or low detriment to the consumer. The median
financial detriment was less than £5. The average financial detriment, however, was £250,
suggesting that when matters do go wrong, they do so spectacularly (Office of Fair Trading
2011, para 2.3). The comparatively low rate of complaints about online transactions is
counter-intuitive given the risks involved. One possible reason, it can be speculated, is
because online sales presently represent a relatively low proportion of overall retail sales,
although online sales are rapidly growing (see Part I, below). Also, online consumers may be
reasonably savvy at protecting their own interests, a circumstance that may change as more
consumers buy online.
Curiosity about possible strategies consumers use to protect them from misleading and
deceptive online market conduct led the author to hold four focus group sessions with
consumers who had purchased products or services online during the previous 12 months.
The interviews were semi-structured, with the aim of allowing participants to speak for
themselves, without being overly directed by any presuppositions held by the interviewer
(namely the author). A number of themes arose from the focus group sessions:
Participants were highly enthusias tic about their online purchasing experiences, with
relatively low prices seen as one of the greatest a dvantages; they were relatively
unconcerned about online privacy; and they relied heavily upon consumer reviews when
making decisions about which products they would buy and from which sellers they
would purchase the products. The nature of the focus group research and its outcomes is
detailed in Parts II and III. This article deals with consumer reliance on online reviews
because it was a dominant theme during all sessions and because it resonated with the
initial research question.
A review was undertaken into the research literature regarding the extent to which
consumers use consumer reviews when making online purchasing decisions and the way
in which they use obtained information. The evidence is consistent with the responses of
focus group participants, who said that they place considerable trust and reliance on online
consumer reviews. A 2009 Nielsen poll of over 25000 Internet consumers from 50 countries
found, for instance, that 70% of participants trusted consumer online opinions (Nielsen
2009). The literature diverges, however, on the question whether the use of consumer
reviews assists in overcoming information asymmetry between online buyers and sellers.
Some researchers claim that the Internet greatly assists with overcoming asymmetry prob-
lems because of the ready means it provides for consumers to learn from the experiences of
others through online reviews. Other commentators claim that fake reviews are so prevalent
and are of such sophistication that they are rendering the use of consumer reviews largely
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ineffective. The evidence that fake reviews are undermining market effectiveness is com-
pelling. The evidence is detailed in Part IV.
Part V argues that governments and regulators should take the problem of fake reviews
and reviewers seriously. Failure to do so risks consumers losing confidence in the market-
place and the development of a lemons market. This is neither in the interests of consum-
ers nor legitimate traders, nor is in the broader communitys economic and social interests.
Although there are laws in many jurisdictions that forbid misleading conduct, such as fake
reviews, regulators struggle to deal with the problem. Admittedly, cracking down on the
conduct is complex and expensive. Part VI proposes that in dealing with the practice
regulators need to take a post-regulatory approach. This involves using smart, lateral
thinking approaches, and the deployment of resources and strategies beyond the standard
command and control regulatory model. This article proposes that these strategies might
include taking an alliance approach. The term alliance approach as coined in this article is
used in both the descriptive and normative senses. Descriptive in the sense of describing
aspects of strategies already used, to a greater or lesser extent, by regulators to work with
regulated firms and industries to attain legislative and regulatory goals. Encouraging indus-
try self-regulation through industry funded and operated consumer complaints ombudsman
schemes is an example. The term regulatory alliance is also used in a normative sense to
propose that regulators ought to adopt an alliance approach to attain public policy goals. Part
VI outlines proposed steps for applying an alliance approach. Finally, the article outlines the
ways in which the alliance approach can be applied to deal with fake online consumer
The Setting: The Online Consumer Marketplace
Online sales represent a relatively small, but rapidly growing, proportion of retail sales.
According to the US Census Bureau, online sales accounted for 4% of total US retail sales
during 2009, which amounted to $145 billion in revenue (US Census Bureau 2012 Statistical
Abstract, Washington, DC, p. 662). In the UK, 12% of the retail sales during 2011 were
online, accounting for £50.34 billion in revenue, up from 8.6% in 2008 (Centre for Retail
Research 2012). During September, 2009 over 14 million UK households used the Internet
to find out about goods and services, and between 2003 and 2008, the percentage of online
advertising revenue generated grew from 3% to 20% of the advertising market (Office of
Fair Trading 2010, para 1.1). Online retail sales during 2011 in Germany were 9% of retail
sales and in France 7.3%. The average European proportion of online retail sales during
2010 was 8.8%, which accounted for sales of 232.76 billion . The estimated European
online retail growth for 2012 is 16%.
Australian online sales accounted for 5% of all retail sales during 2011 (Speedy 2012).
During the previous year, approximately 36% of the population made at least one online
purchase each month, and 6% bought at least one online product each week
(Digitalmarketinglab 2010).
The Research Methodology
As mentioned at the outset, the catalyst for research reported in this article was the authors
curiosity about if and how consumers protect themselves from the risks of purchasing goods
or services that are inferior or unwanted and how they ensure they are purchasing from
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reliable sellers. The focus group research method was chosen for initial exploration of these
questions because it allows explorative flexibility and enables the researcher to see reality
from a clients point of view (Krueger 1994, p. 9). It also allows the researcher to collect
data with an open willingness to learn from the participants and to explore new questions
that are likely to emerge from the study (Lederer 2010, p. 158). This enables the generation
of ideas and thoughts linked to the objects and concepts under analysis (Brito 2011, p. 520).
It also enables taking a holistic perspective on an issue and gaining a contextual under-
standing of the research issues. The aim of the focus group interviews, therefore, was to
avoid predetermined outcomes, that is to say, using a less obtrusive means for attaining data
(Patton 1990, p. 132). The aim, therefore, was to gain a sense of the broad concerns,
interests, and desires of focus group participants and to gain a general sense of the strategies
they might adopt to avoid disappointment when purchasing products and services online.
Four focus group sessions were conducted by the author between 2 May and 10 May
2011 in Melbourne, Australia. Ea ch focus group comprised of eight participants. Each
participant was required to have purchased consumer goods or services on the Internet over
the previous 12 months, which means they were drawn from the estimated 36% of the
Australian population, based on 2010 figures, which had made at least one online purchase
each month (Digitalmarketinglab 2010). The participants were selected by an independent
marketing company, Phyllis Mitchell & Associates, which retains a database of the names of
people who are willing to participate in market research studies.
The participants age groupings were as follows: 12 were aged between 18 and 25 years,
10 were between 26 and 35, five between 36 and 45, three between 46 and 55, and two were
over 55 years of age. Sixteen participants held white collar jobs, seven blue collar, and nine
were students. The overall number of participants was 32, of whom 16 were males and 16
It is not claimed that the focus group participants were necessarily representative of the
broader population of Internet users. The value of focus groups is usefully summarized by
Focus groups can help to explore or generate hypotheses (Powell and Single 1996)
and develop questions or concepts for questionnaires and interview guides (Hoppe et
al. 1995; Lankshear 1993). They are however limited in terms of their ability to
generalize findings to a whole population, mainly because of the small numbers of
people participating and the likelihood that the participants will not be a representative
sample (Gibbs 1997).
In any event, Hernández et al. (2011) conclude as a result of their research that the
socioeconomic characteristics of the individual (age, gender and income) have scarcely any
significance in the explanation of the behaviour of e-shoppers, once these have acquired
experience with the channel (p. 127). Their findings are consistent with the responses of the
focus group participants, who showed no discernible differences in their accounts about their
online shopping behaviour based on their age, gender, or income.
Some of the focus group participants claimed they had used the Internet quite extensively
over the previous 12 months. One participant claimed he purchased all the goods and
services he uses for day-to-day living via the Internet, including all his groceries. Other
participants classified themselves as moderate to low users.
The interviews were semi-structured, so as to enable participants largely to determine the
direction of the discussion. A discussion sheet was designed prior to the interviews which
was used by the moderator (the author of this article) to broadly direct the discussion (see the
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The study did not interview consumers who suffer from a particular disadvantage,
vulnerability or incapacity arising from their age, unfamiliarity with the language being
used for the transaction, diminished mental capacity, poor education, or low income. The
protection of vulnerable consumers in the online world ought to be of significant policy and
regulatory interest; however, this is not the focus of this article. Rather attention is given here
to ways in which regulators can build and maintain consumer confidence in the online
marketplace more generally.
Consumers are able to purchase a wide range of goods and services online, including
banking, telecommunications, and insurance services, as well as travel services, including
airline tickets, hire cars, and accommodation, along with consumer goods. Focus group
participants were not asked to ignore any categories of consumer products. Despite this,
there was very little discussion about banking, telecommunications, or insurance services. It
is possible that participants considered the online purchase of these products as relatively
mainstream activities and therefore did not consider it necessary to distinguish them as a
distinct online shopping experience. Alternatively, they associated online purchasing with
the purchase of consumer goods rather than consumer services. Despite the focus on
consumer goods, there was some discussion about the purchase of travel-related services,
including the booking of hotel and other accommodation.
Results and Observations
Overall, the responses of focus group participants were overwhelmingly positive about
their online shopping experiences. Even when invited to discuss negative experiences,
participants tended to view any bad experience as causing them only relatively minor
inconvenience or loss, or as offering a useful lesson for the future. A theme that was
most pronounced in all focus group sessions was the extent to which participants sought
and relied upon consumer reviews about products and sellers. Consumer reviews appear
in the form of ratings systems and commentary on intermediary sites such as eBay, and TripAdvisor, Expedia, Priceline, Travelocity, Orbitz, and
Consumer reviews also appear in a wide array of other forms including on social
networking sites such as Facebook and Google+, as well as in the form of blogs.
Indeed, reviews will appear in any form of communication available on the Internet
(Flanagin et al. 2011, p. 2).
The reliance that focus group participants said they placed on online consumer reviews is
consistent with the findings of an online Nielsen poll taken in 2009 of over 25000 Internet
consumers from 50 countries. Ninety percent of consumers surveyed stated that they trust
recommendations from people they know, whilst 70% trusted consumer online opinions.
This compares with approximately 60% of respondents trusting advertisements in news-
papers, magazines, and billboards and 55% trusting radio advertisements (Nielsen 2009).
Other research confirms that consumers regard web-based information to be equally credible
to that obtained from traditional media (Flanagin and Metzger 2000) and frequently turn to
online ratings and reputation systems to assist with product and seller evaluations (Pinch and
Kesler 2011, p. 12). The typical responses of focus group participants to the value they
attach to consumer reviews can be illustrated by the response of one participant, who
remarked that:
Reviews from other users are very helpful. They are much better than walking into a
shop and hearing the shopkeeper rave about their own product.
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This suggested that the participant placed a greater reliability on online reviews than the
opinions and advice of a salesperson in a real-world store. Another indication of the reliance
placed upon reviews arises from the comment by one participant that:
You can go back to the shop, but sometimes the seller is on the other side of Australia,
or overseas, so you cant go back and claim the warranty So thats where trust
comes in ratings, reviews.
Another participant stated that, Its the Internet, its not a lonely place, suggesting that
users sense that there are many other online consumers who can assist them with making
purchasing decisions.
Although online consumers readily seek the views of other consumers about products and
sellers, they are generally reluctant to offer their own views. The following comment made
by one focus group participant was typical of the views held by other participants:
A grading system, a 5 minute survey? Sorry, Im too slack, I couldnt be bothered.
Given that consumers rely heavily upon online reviews, the question then arises as to how
they use the information they obtain. According to Flanagan, when consumers use online
reviews, they pay attention to contextual information such as a reviewers reputation and
exposure (Flanagan et al. 2011, p. 3). He says that:
People place most importance on evaluating whether commercial website information
is secure, up-to-date, and complete when determining the credibility of online com-
mercial information, but next they rely on product ratings, comments, and reviews
(among other factors) to make decisions about credibility and whether or not to
purchase a product (Flanagan et al. 2011, p. 7).
Consum er assessments of the credibility of information are based on their perceptions
regarding a sources expertise, trustworthiness, or attractiveness, as well as upon judgements
about the quality and accuracy of the information (Kwon and Sung 2012). Although it can be
generalized that consumers adopt these approaches, the qualification needs to be made that
more specific assessments about the way consumers process product information is quite
complicated and hard to predict (Kwon and Sung 2012, p. 207).
Research suggests tha t consumers giv e negative information more weight than
positive information (Kwon and Sung 2012, p. 208). However, consumers consider
that reviews with extreme ratings are less helpful than those with moderate ratings
(Danescu-Niculescu-Mizil et al. 2009; Kwon and Sung 2012,p.207).Thefocus
group participants also exercised a degree of caution regarding negative reviews. As
one participant commented:
One bad review among hundreds of good ones is usually okay. On the other hand, if
its one good review among only a few in total then you need to be more careful. They
either dont have a reputation yet, or they dont have a bad reputation yet.
Another participant commented:
What does one [negative] review tell you?
Ironically, in some instances, a negative review left some participants with a positive
impression of the product and the seller. One participant mentioned that he placed heavy
reliance on reviews when deciding which hotels to book for a holiday in Vietnam. He noted
that some reviewers had complained that the bathroom of a particular hotel was not properly
cleaned. However, when he considered these complaints in the context of the low price of
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the accommodation and the splendid coastal views, the positives were seen to clearly
outweigh the negatives.
Generally speaking, when consumers make decisions about purchasing products, they
use intrinsic clues (which constitute the physical part of the product) and extrinsic clues (that
are related to the product but do not constitute the product) for product evaluation (Chu and
Song, p. 116). In the online environment, consumers are generally required to look for
extrinsic clues. For instance, when considering whether to buy from an unknown seller on
eBay, one focus group participant said:
You can see how many transactions a seller has made 100% feedback combined
with lots of sales is a good sign.
The responses of focus group participants were consistent with the observation by Kwon
and Sung that:
when consumers have difficulty in discovering product qualities and attributes prior to
purchase and use, they rely more on fellow consumers purchase and usage experiences
to reduce the ambiguity of judgemental criteria (Kwon and Sung 2012,p.208).
Focus group participants expressed a reasonable degree of confidence in their abilities to
detect misleading and fake reviews. However, a growing body of research suggests that
consumers face an increasingly challenging environment for detecting fake reviews. Del
Riego claims, for instance, that it is virtually impossible for an online consumer to determine
whether a reviewer is genuinely expressing his or her opin ion ab out a product or i s
influenced by other motivations (Del Riego 2009). The difficulties consumers face is
discussed further in the following part.
Discussion: Fake Reviews
Many firms that sell products and services online and their marketing firms are well aware of
the weight and significance consumers attach to online reviews (Forrest and Cao 2010,p.
88). Almost 80% of Fortune 100 companies are using at least one of the main social media
platforms to communicate with their customers and encourage their views and participation
in marketing campaigns, which is not to suggest that they necessarily do so in a misleading
way (Forrest and Cao 2010, p. 89). The increasing popularity of sites that provide for user
reviews, such TripAdvisor and Yelp, along with rapid growth of social media sites such as
Facebook and Google+, no doubt increases the temptation to game the system with
misleading or fraudulent reviews. Indeed, some marketing and other firms actively promote
their ability to promote a sellers products using social media, blogs, and other online
websites (Ott et al. 2011, p. 309). In some cases, firms are using dubious and illegal means
for promoting products, including through the creation of fake consumer identities and the
payment of people to write fake reviews using those fake identities.
In some cases, the fakery of an online review is clearly egregious, such as the creation of
false identities for the purposes of writing reviews, and in other cases, it involves borderline
activities, such as where a restaurateur offers a customer a free coffee in exchange for the
customer posting a review on a review site, such as (Sprague and Wells
2010, p. 417). Here the hotelier may well have no control over what the customer actually
posts on the site, so the review may reflect genuine opinions despite the inducement.
Other more complex forms of online information manipulation also exist, including the
rank ordering of information provided to consumers by search engines. The load time of
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webpages and their design and a whole wide range of other manipulations to present
information also exist, without the consumer being aware of the manipulation. According
to Lankes, consumers:
are simply unable to, or fail to, recognize many of the more technical influences on
the information with which they are provided in the first place. In fact, there is a great
deal of information manipulation that occurs that is never perceptible to the user. Built
into the tools themselves are filters, assumptions, biases, and outright distortions that
can never be factored into a users credibility decision (Lankes 2008, p. 104).
Various names are given to misleading online activity, from the more euphemistic online
reputation management (which in some cases may involve countering misleading conduct,
but in other cases engaging in it) (Cole 2011); to terms such as opinion or review spamming;
buzz, stealth, and masked marketing (Sprague and Wells 2010); and astroturfing. Buzz
marketing involves inviting or encouraging consumers to voluntarily promote products in
return for inducements such as coupons or discounts. In other cases, it involves a more
elaborate online marketing campaign. A stealth campaign involves the promotion of prod-
ucts by consumers whose identities are masked and may well be faked (European
Parliament 2010, para 1.2.1; Sprague and Wells 2010, p. 419). The term astroturfing
was apparently coined by a former US Senator in 1985 to describe lobbying letters he
believed were generated mail from the insurance industry. AstroTurf® is a brand of artificial
grass. Just as AstroTurf is fake grass, astroturfing is fake a grassroots campaign. The term
has evolved to also mean methods used by marketeers and others to give potential consum-
ers the impression that ordinary online users are recommending a particular product when in
fact the recommendations are made by or on behalf of the seller (Lankes 2008, p. 114). The
activities listed below are examples of the more egregious forms of misleading conduct
taking place in the online consumer marketplace:
& The Internet abounds with advertisements offering fake reviews for a price (Ashton
2012; Wall Street Times 2012).
& Group reviewers who work collaboratively to write fake reviews have been found to be
prevalent (Mukherjee et al. 2012).
& Technological systems that create fake identities, including the fake persons name, e-
mail account, webpages, and social media, were discovered by US cyber-security,
HBGary Federal. Human Astroturfers were then assigned those accounts to create a
back story (Monbiot 2011).
& The Times newspaper in the UK discovered that hotel owners were paying up to £10000
to agencies so as to improve their travel review rankings (McCracken 2011).
& The UK Office of Fair Trading recently accepted legal undertakings from MoreNiche
Limited, a company that runs an online network with nearly 150000 affiliate marketing
businesses worldwide that market products such as diet aids and teeth whitening
products. The company was alleged to have breached the Consumer Protection from
Unfair Trading Regulations 2008 by not disclosing to users that affiliate promotions
were paid for by a commercial firm and that editorial content was not written by the
apparent author (Office of Fair Trading 2012).
& A New York plastic surgery franchise entered a $300000 settlement with the New York
Attorney Generals department for posting fake online consumer reviews (Miller 2009).
& The UK Advertising Standards Authority ruled that the claim made on TripAdvisors
site of trusted advice from real travellers was misleading because fake comments could
be posted without verification (Wall Street Times 4 April 2012).
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Forrest and Cao provide the following further examples:
& A representative of [a] global computer har dware manuf acturer was r ecently
caught paying users to leave positive reviews for its products on Amazon and
& The marketing division of a textbook company was recently forced to cancel their
strategy of giving $25 Amazon gift certificates to every user who rated their textbooks
positively on the site.
& Interns of a PR firm representing many makers of applications for Apple s iPhone, were
caught rating its clients products positively on Apples Application Store.
& Colleen Padilla, a 33-year-old mother of two who lives in suburban Philadelphia, has
reviewed nearly 1,500 products, including baby clothes, microwave dinners and the
Nintendo Wii, on her popular Web site Her site attracts 60,000
unique visitors every month, and Ms. Padilla attracts something else: free items from
companies eager to promote their products to her readers.
& Izea, an online marketing company based in Orlando, Fla., which created PayPerPost,
says it has 25,000 active advertisers ranging from Sea World to small online retailers. It
feeds to 265,000 bloggers in its network, and pays, on average, $34 a post (Forrest and
Cao 2010, pp. 9091).
According to Lim et al., it is not clear how much review spam exists in online product
review sites, but their existence causes several problems including unfair treatment of
products either independently or in comparison with other similar products (Lim et al.
2010, pp. 939940). Lim et al. also observe that:
Due to the openness of product review sites, spammers can pose as different users
(known as sockpuppeting) contributing spammed reviews making them harder to
eradicate completely. Spam reviews usually look perfectly normal until one compares
them wit h other reviews of the same products to identify review comments not
consistent with the latter (Lim et al. 2010, p. 940).
The more egregious forms of misleading and deceptive practices are unlawful in many
countries. In December 2009, the US Federal Trade Commission formally instituted guide-
lines covering online testimonials and endorsements. The guidelines set four requirements:
(1) the advertiser has a duty to educate blogging endorsers regarding the guidelines, (2) the
endorser has a duty to write an honest review, (3) the endorser has a duty to disclose any
material relationship between him/her and the advertiser, and (4) the advertiser has a duty to
monitor the endorsers blogs and online outlets to ensure they are not deceptive to consum-
ers (Forrest and Cao 2010, p. 90). Regulatory measures to ensure compliance include cease
and desist orders and fines of $16000 per day per violation. Violators can be ordered to make
full or partial customer refunds and can be required to make corrective advertisements.
The European Unions directive Unfair Commercial Practices Directive requires the
prohibition of the use of editorial content in the media to promote a product where a trader
has paid for the promotion without making that clear”…and falsely representing oneself as
a consumer.
The EU Directive on Misleading an d Comparative Advertising requires
prohibitions on unfair trading practices, including denigrating competitors and creating
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005
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confusion in the mind of consumers.
The UK Consumer Protection from Unfair Trading
Regulations 2008 prohibit falsely representing oneself as a consumer when promoting a
product to consumers. The maximum penalty for a breach is 2 years imprisonment and/or an
unlimited fine. In addition, the UK advertising industry has developed a number of voluntary
codes of conduct, including the Code of Non-broadcast Advertising, Sales Promotion and
Direct Marketing, the most recent version of which came into force on 1 September 2010.
Article 3.1 of the Code requires that marketing communications must not materially mislead
or be likely to do so, Article 3.5 requires that the communications not materially mislead by
omitting the identity of the marketer, and Article 3.45 requires that marketers hold docu-
mentary evidence that a testimonial or endorsement used in a marketing communication is
genuine, unless it is obviously fictitious. Marketeers must also hold contact details for the
person who, or organization that, gives endorsement. Complaints for alleged breaches are
dealt with by the Advertising standards Authority, which is an independent industry funded
In Australia, Section 18 o f the Australian Consumer Law prohibits misleading and
deceptive conduct. There are a broad range of penalties and remedies that can be applied
if there is a breach. The courts interpret the scope of misleading and deceptive conduct
very broadly. In the recent case of Australian Competition and Consumer Commission v
Google Inc,
for instance, the Full Federal Court found that the display of sponsored links in
response to a users Google search queries that listed the name of an advertisers competitor
above the advertisers URL link to their webpage constituted misleading and deceptive
conduct. There is little doubt th at the more egregio us forms of fake reviews, at least,
constitute misleading and deceptive conduct. The vast majority of Australian misleading
and deceptive conduct actions are not brought by the regulator (the Australian Competition
and Consumer Commission), but by competitors. This has, since the introduction of the
provision in 1975, given the provision powerful effect. It has also enabled the attaining of
the policy objectives of the provision without overburdening the stretched resources of the
Information Asymmetry
Enforcing laws and industry standards to reduce the incidence of fake reviews admittedly is
difficult as they are hard to detect, and in some cases, the breaching party is outside the
regulators jurisdiction. Even if the party is within jurisdiction, it is often difficult proving
that a reviewer was paid by a business to write a review (European et al. 2010, para 1.2.1).
As a result, there have been very few cases dealt with by the courts (European Parliament
2010, para 1.2.1). Although the scope of these misleading and deceptive practices is difficult
to assess, they do appear to be widespread (Lim et al. 2010, p. 940). The prevalence of fake
reviews leads to the very real risk of eroding consumer confidence in the online marketplace.
The market is growing at an exponential rate, and its fair and efficient operation is, or ought
to be, a matter of serious regulatory concern and attention.
One of the risks of not dealing with the problem is the development of a lemons market.
In a seminal article, George Akerlof showed that a lemons market can arise where informa-
tion asymmetries exist leading to buyers discounting the price they are prepared to pay for a
product because of the perceived (or actual) risk of buying a lemon (a defective or inferior
product) (Akerlof 1970). If buyers are only willing to pay a discounted price, it can drive out
Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006
[2012] FCAFC 49
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quality products from the marketplace, which further drives down prices and quality,
potentially leading to a downward spiral into a lemons marketplace. This results in adverse
selection, leading to sub-optimal market conditions in which there is a misallocation of
economic resources.
Adverse selection can be illustrated as follows. Assume that sellers have privileged
information about their products. If a particular type of product (say, a toaster) is sold at
the same price by all manufacturers and retailers, producing and selling low-quality toasters
is more profitable than producing and selling high-quality toasters. In this setting, sellers
would be able to present low-quality toasters as high-quality toasters, and buyers would have
little or no information about the trustworthiness of the seller (Izquierdo and Izquierdo 2007,
p. 858). This circumstance leads to adverse selection, where sellers offer items that are less
favourable to buyers. It is as if the market selects adverse items for uninformed consumers
(Izquierdo and Izquierdo 2007, p. 859). In an extreme case of no information sharing and no
high-quality variability, a market can be completely destroyed (Izquierdo and Izquierdo
2007, p. 865).
Information asymmetry between buyers and sellers can undermine buyer confidence in
the market. And consumer confidence is linked to the nature and quality of consumer
knowledge about the products on offer and the sellers of the products.
The Internet offers an information-rich environment. This would appear to provide
a means to overcome information asymmetry, for instance by enabling consumers to
share quality information through social networks so that buyers not only learn from
their own past experience but also from the experiences of other consumers (Izquierdo
and Izquierdo 2007 , p. 859). This could reduce uncertainty about products and reduce
perceived purchase risks (Kwon and Sung 2012, p. 211). Indeed, there is evidence to
suggest that to a degree this is the case as a diverse pool of product reviews is
generally associated with higher sales of reviewed products (Kwon and Sung 2012,p.
211). In addition, the focus group participants spoke favourably about the value they
attach to reviews, suggesting that this made them more inclined to purchase onlin e.
Paradoxically, t he Internets capacity to enable the ready means for anyone to provide
product information, or to gain access to considerable amounts of information about
products and th eir sellers, not only p roduces conditions that enable the reduction
information asymmetry but also produces the conditions that exacerbate it. The
Internet provides a convenient and low-cost means for anyone to provid e reliable
and useful information and just as readily provides the capacity for anyone t o provide
confusing, conflicting, misleading, inaccurate, or false information.
If the general quality of review information deteriorates, or consumers lose confidence in
its veracity, there is a real risk of them placing little or no reliance on the information. A
substantial loss of confidence can arise even if fake reviews represent a relatively minor
proportion of reviews overall. Tushnet provides the following illustration of this effect.
Assume that an online site enables product reviews and that one in every 10 reviews is a
fake. If consumers knew that there were fake reviews, but did know which ones were fake,
they would likely overly discount all reviews, thereby discounting many genuine reviews
(Tushnet 2011, fn 16).
It can be seen, therefore, that loss of consumer confidence in a prime m echanism
for o vercoming information asymmetries underm ines the economic efficiency of the
online m arket and leads to a misallocation of resources. It can also reduce competition
within the market as c onsumers may only trust sellers with a large presence and an
established r eputation, such as Amazon. As a consequence, fake reviews should be
taken seriously.
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Regulation of the Online Consumer Marketplace
Regulators face significant challenges because of the difficulties involved in detecting fake
reviews and bringing enforcement action to bear. Regulatory resources are probably best
spent on dealing with firms that are engaged in promoting fake reviews or take no
meaningful action to curb the practice on their sites, rather than dealing with individuals
who engage in the practice at the encouragement of the firms. Sole reliance by legislators
and regulators on a command and control approach to the problem will doubtless prove
inadequate. This approach involves the legislature proscribing certain behaviour, regulators
policing compliance, and courts imposing sanctions for breach. Using this system solely to
regulate firms more generally has proven particularly problematic because of difficulties in
pinning guilt upon particular individuals for organizational breaches, which often involve
many people within the firm and whose culpability can vary considerably. Firms also have
the capacity to close ranks, rendering obtaining evidence problematic. In any event, firm
behaviour is often driven not by regulatory pressure but by the culture prevailing in the
sector or by the far more pressing forces of competition (Baldwin and Black 2008, p. 63). An
additional limitation of traditional regulatory systems is that they have problems keeping up
with technological changes (Scott 2004b, p. 483).
These challenges to command and control systems invite the adoption of additional, more
responsive and reflexive, regulatory strategies. Gunningham and Grabosky, for instance,
propose the adoption of smart regulation, which involves thinking laterally and taking a
more holistic approach than is allowed for under the traditional state sanctioning approach.
Smart regulation involves the use of a wide armoury of approaches designed to attain policy
objectives such as educative, deterrence-based, responsive, and targeted a pproaches
(Baldwin and Black 2008, p. 63; Gunningham and Grabosky 1998). Measures that might
be applied for these approaches include industry codes of conduct, feedback mechanisms
and monitoring, enforceable undertakings, corrective advertising, and more generalized
standard-setting requirements.
The challenges and responses to traditional regulatory systems have led to what Scott
describes as the post-regulatory state, in which regulatory governance is no longer seen as
being dependent on state law, or at least where state law is not seen as being central (Scott
2004a, p. 147). Here, regulation is seen to be not only about government activities but also
about controls that are linked to the generation and enforcement of social norms and the
standard-setting, monitoring, and behavior-modification functions of markets (Scott 2004b,
p. 484). Comprehending the dimensions of the post-regulatory state requires a shift in our
understanding of who controls and who is controlled within regimes (Scott 2004a, p. 147).
In summary, the post-regulatory state recognizes that: (1) the law has limited capacity to
exert control, (2) control based on law is marginal to contemporary processes of ordering,
and (3) state law is only likely to be effective when linked to other ordering processes (Scott
2004a, p. 151). That is to say conventional approaches to governmental power, which
emphasize its legitimacy and basis in consent, are displaced by greater emphasis on local or
capillary power’” (Scott 2004a, p. 154).
At its broadest, then, regulatory control can be seen as the exercise of power to attain
socially desirable outcomeswhether that power is exercised in a formal sense by govern-
ment agencies or in an informal sense by individuals and organizations. Informal power,
however, is usually not exercised by an individual or organization with the intention of
attaining a particular desired social end. Generally the power will be exercised to gain a
personal or organizational benefit. The exercise of personal (regulatory) power will co-
incidentallyand unintentionallyin uncoordinated concert with other individuals lead to
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the attainment of a social benefit. This effect can be illustrated in the following way: Assume
a seller sells products with a hidden defect that is known to the seller but not to buyers.
Assume also that someone buys the product and discovers the defect after using it. She tells
her friends, who then tell their friends, and so on. Spreading the word in this way warns off
other potential buyers and causes the sellers business to suffer. If the mechanism for
spreading the word is efficient, it will drive the seller out of business or at least prompt
her to sell non-defective products. Here spreading the word operates as an effective informal
exercise of regulatory power. The original buyer sought only to warn her friends. She saw
this as a personal gesture to help a friend, rather than an act designed to attain broader social
ends. Nevertheless, in this more idealized example, her personal act also co-incidentally, and
unintentionally, assisted with advancing broader social ends.
Regulation, it can be said, is intimately related to power, that is, the power to moderate
behaviour to attain social, political, and economic aims. The regulatory power is traditionally
seen as solely top-down. However, from the perspective of the post-regulatory state, regulatory
power can be seen as operating in both a top-down and a bottom-up, atomized, way. Generally,
those exercising formal top-down power do so to attain defined public policy ends, whilst those
exercising informal bottom-up regulatory power generally do not do so to attain public policy
ends. The exercise of power does not generally flow in one direction (that is from the instigator
at the top to those who are required to comply at that bottom) (Black 2002, pp. 165166).
Rather, the power is exercised (and submitted to) in various localities and by various people
holding all sorts of formal and informal positions of power (or none at all). These people can be
found in prisons, hospitals, schools, shops, and so on. Regulatory power, therefore, has multiple
sources and its flows are complex and interactive.
These dispersals and interactions of power do not represent a threat to the exercise of
formal regulatory power; rather, it expands its possibilities. It allows for the identification of
a greater variety of bases of control than just hierarchy and state law (Scott 2004b, p. 147). In
the case of the online consumer market, those bases of control may be found through the
exercise of informal regulatory power by firms and consumers. These sources of power may
be harnessed in a variety of ways. This article proposes that one of those ways may include
adopting what is coined here as an alliance approach. This requires identifying sources of
atomistic power that can be harnessed to attain desired public policy ends. Once identified,
the next step is to identify the ways in which the regulator can act in alliance with the parties
exercising those localized sources of power. The alliance will work most effectively if the
formal public policy aims for the exercise of regulatory power either align or at least are not
in conflict, with the personal aims of those exercising localized power. Further effectiveness
can be attained where the formal systems enhance, amplify, or work in concert with localized
informal exercises of power. As an example, the public policy aims of reducing fake reviews
to build consumer confidence in the market fits with individual consumer aims of avoiding
negative purchasing experiences. In both cases, the ultimate desire is for a fair and compet-
itive marketplace.
Mention here of the adoption of an alliance approach is made for both descriptive and
normative purposes, descriptive in the sense that agencies to some extent already work with
non-formal sources of power (non-formal in the strict sense of power exercised by non-
governmental agencies) to attain social, political, and economic ends. The encouragement of
industry self-regulatory systems is an example. The proposal that an alliance approach be
added to the existing regulatory armoury of regulatory systems is normative in the sense of
claiming that an alliance approach can and ought to take things further in the pursuit of
public policy goals. This can be done by harnessing the actual and potential regulatory
powers of allies, such as firms and consumers.
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The alliance regulatory model as proposed in this article involves
1. Identifying the policy or regulatory objectives being sought
2. Identifying the parties of policy and regulatory interestthese may include the regula-
tory beneficiaries, that is to say, those who would benefit from the effective imple-
mentation of the regulations. Some or all of these parties are potential regulatory allies
3. Identifying the matters of policy and regulatory concern to the allies. The identification
process may involve hearing the concerns of the allies
4. Identifying the nature and capacity of any regulatory power (broadly conceived) of
the allies
5. Considering ways in which the regulator or policy maker can harness or align itself with
the exercise of that power to attain desired policy and regulatory outcomes
These steps can be applied for the purposes of dealing with fake reviews. Step 1 is a
standard early step in the policy development process. In the case of the online consumer
marketplace, a public policy objective might be to improve market fairness and efficiency.
As discussed in Part V, an economically efficient marketplace can be advanced by reducing
or eliminating information asymmetries. Doing so would enhance consumer trust and
confidence in the marketplace, thereby increasing the willingness of consumers to participate
in the market. If these conditions are realised and maintained, they will promote economic
activity and the efficient allocation of economic resources. From a fairness perspective, the
reduction of misleading practices reduces the possibilities of consumers buying unwanted
and defective products and services.
Step 2 involves identi fying the potential beneficiaries of laws and regulations th at
undermine fair and efficient market conditions. The laws considered here are those that
crack down on fake reviews. The beneficiaries may include the operators of review sites and
businesses that are actually or potentially affected by false unfavourable reviews. There may
also be businesses that are engaged in the practice of paying for fake reviews because they
feel under pressure from their competitors to do so. That is, they would prefer not to engage
in the practice, but feel under pressure to do so because their competitors are gaining an
unfair advantage. Effectively cracking down on fake reviews would remove that pressure.
Other potential beneficiaries are consumers who use the Internet for shopping, or may do so
in the future. These beneficiaries can be considered as potential allies for attaining the public
policy aims of improving marketplace conditions.
Step 3 involves identifying the matters of policy and regulatory concern to the allies. The
discussion above in this article outlines some of the matters that may well be of concern.
Legitimate businesses may well be concerned about damage done to their business as a
result of false and misleading reviews. They might also be concerned that if consumers lose
confidence in reviews and cease to rely upon them, a valuable means for attracting business
could be lost. Consumers may be conce rned that they are being misled when making
decisions about which products to purchase and from which sellers. Consumers might be
heard through consultation processes and through obtaining and analysing evidence-based
research into consumer behaviour and desires.
Step 4 involves identifying the allies’“regulatory powers. These powers are to be
understood in the broadest sense, that is, as the power to moderate relevant wrongful conduct
in some way. Firms may have the power to undertake their own detective work to identify
and deal wi th fake reviews. They might, for example, use online detectives such as
kwi to disco ver the practice. If the behaviour is detected, they might consider
bringing defamation actions. They might also report their discoveries to media organizations
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in order to name and shame offenders. In Australia, firms can bring an action under section
18 of the Australian Consumer Law, alleging deceptive and misleading conduct.
Consumers have two significant and interrelated forms of informal regulatory power.
They can decide not to purchase products or services from a particular seller. They can also
cause reputational harm (fairly or unfairly) to a seller, which may impact upon a sellers
reputation for trustworthiness, reliability, responsiveness, and for selling products of an
appropriate quality and reliability (Bar-Isaac 2005; Bolton et al. 2004; Calliess 2007,p.4;
Fehr and Schmidt 1999; Hörner 2002). The Internet can facilitate the power to impact upon
reputations through consumer reviews and other forms of online communication. Causing
negative reputational impacts is sometimes described as cybergriping (Schwartz 2006).
The risk of reputational damage can therefore operate as an effective online regulator of
firms behaviour (Becher and Zarsky 2008). Cracking down on fake reviews therefore can
enhance consumer regulatory power to deal with untrustworthy sellers and the sale of
defective and unreliable products.
Step 5 involves considering ways the regulator or policy maker can harness or align itself
with the exercise of localised regulatory power. A number of suggestions can be made about
dealing with fake reviews. Jurisdictions outside Australia might consider enabling compet-
itors to have standing to bring deceptive and misleading conduct actions against a firm,
without the requirement that the plaintive establish that it has been actually harmed by the
conduct. Other suggested possible strategies include a regulator:
& Acting in coordination with regulators in various other jurisdictions to require that sites
that allow for reviews clearly display a regulator approved traffic light system indicating
the extent to which each site has adopted reasonable strategies to detect fake reviews. A
red light would signal that reviews on the site are not to be trusted, whilst a green light
would signal that the site has taken reasonable measures to detect and remove fake
reviews. An amber light would signal that caution should be exercised
& May seek evidence from users and members of industry when deciding which colour
traffic light should be assigned to a particular site
& May undertake education programmes to inform marketeers and firms about the legality
of practices that encourage or allow fake reviews
& Could provide small monetary or other rewards or acknowledgements for consumers or
businesses that spot offenders and report them to regulators
& Could provide support for private systems for identifying and reporting on sites that
facilitate or tolerate fake reviews
The Internet offers the potential to reduce, and (ideally) even eliminate, information asymmetry
between buyers and sellers of consumer products and services. This would potentially enhance
consumer confidence, increase consumer participation, increase competition, and reduce ad-
verse selection. This would lead to a more efficient allocation of economic resources and
increase fairness. One factor that is undermining these potentials is sellers and their marketeers
engaging in misleading and deceptive conduct. The creation of fake online consumer identities
and fake consumer reviews is conduct designed to deceive and mislead consumers. Although
consumers have some ability to detect fake reviews, the practice is becoming increasingly
sophisticated. It is a practice that policy makers and regulators need to take seriously, even
though cracking down on the practice admittedly is difficult.
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This article proposed that an alliance approach be added to existing regulatory com-
pliance systems and practices. Although it is unlikely such an approach will solve the
problem, it offers a means for better dealing with the problem.
Acknowledgments The author is grateful for the assistance of Joel Gory in conducting focus group inter-
views mentioned in this article and for writing up summaries of the interviews. He is also grateful for the
financial assistance for this project from the Monash Law School.
Focus Group Semi-structured Questions
Outline Contracting
1. Experiences with buying goods and services on the Internet:
& Have you bought goods or services over the Internet?
& Discuss what kinds of goods and services were purchased and when they were
purchased (types of contracts: gym memberships, airline tickets, concert tickets,
purchasing goods from eBay or other places, downloading mus ic, movies and
books, hire cars)
Discuss how frequently purchases are made using the Internet
Discuss which are the more popular of the websites and why
2. Good experiences with Internet purchasing
& Discuss if purchases went well, what were the good experiences in terms of the
value of the things you bought on the Internettimeliness of delivery follow-up
within complaint, etc.
3. Not so good experiences with Internet purchasing
& Have you had any negative experiences with purchasing goods on the Internet?
Discuss what those negative experiences might hav e been, e.g., any nasty
surprises, that is, there were terms or policies of the supplier not what you
expected? Examples, highly unexpected charges for returning a hire car late,
significant exclusions in an insurance contract, unexpectedly difficult in get-
ting any readdress, unexpectedly difficult to cancel or rollover contract;
unexpected fees or charges; no easy way to resolve the dispute, or no means
at all
& Reactions to a bad experience
Did it make you more cautious, and if so how; did it make you less likely to shop
on Internet; did it make you less likely to shop around?
& Did you tell your friends and family about the bad experiences? Had anyone already
warned you about that particular site or supplier or brand? (the impact of teaching/
4. Saliency
& Were there any conditions about buying the goods o r services that you were
particularly looking for when you went onlineif so, what were they?
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& Were there any conditions that became important to you after you had bought the
goods or serviceswhat were they?
& After asking whether they were looking for information on anything in particular,
you could ask them whether that information was what they expected? If not, did
that make them rethink the purchase? (gauging expectations vs. reality?)
5. Contract Issues
& Were the goods/services of expected quality?
& If they were notwhat did you do about it?
& From that experiencewhat would you do differently next time?
& Was it easy/not easy to resolve any issues in dispute?
& How did you deal with any issues in dispute?
6. Comparing online with real-world purchasing
& Do you think it is more difficult online and off-line to understand what the terms and
conditions are, what services or goods will be supplied, how any problems will be
sorted out?
& Ideally how would you like any issues you have any sorted out in the future?
& Given your experiences, would you pay more for real-world services next time?
7. Terms and conditions
& Have you ever read the terms and conditions before you click I agree?
& If so, were there any terms you were looking for, and if so what were they?
& If you didnt read themwhy not?
& Given your past experience, particularly any bad experiences, what terms would you
like highlighted or brought to your attention before you click I agree?
& Can you recall any time when you have had a particular term drawn to your specific
attention either online or by a person, e.g., cancellation policy; how did that make
you feel about the particular provider and the service they were offering?
& Would you like to be able to negotiateor chosecertain terms?
& If so, what would they be, and why?
8. Ideal website
& If you could go to the ideal website for shoppingwhat would that site look like
and what features would it have (ignore for the moment the types of consumer
goods or services that are actually being sold through the website)?
9. Summing up
& If you could pass on advice to others buying goods/services on the Internet, what
particular advice would you offer them?
& What would make you feel more comfortable in the future about the terms and
conditions before you clicked I agree?
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... It's because data intelligence is used in the tourism industry that many people are trying to make automatic tools that can tell when people are giving false reviews (Hajek and Sahut, 2022). Furthermore, Malbon (2013) indicated that consumers depend heavily on online reviews when making a purchase decision. Consequently, sellers and marketers facilitate generating positive fake reviews to gain fake customer trust, to improve their products'/services' reputation, or to harm competitors' reputations (Martínez Otero, 2021). ...
... Indeed, detecting fake reviews is a complicated mission. However, some laws and regulations restrict the conduction of bias and misinformation (Malbon, 2013). Missing a source's honest feedback about the quality of products or services is an obstacle to investing efforts in improving a firm's services (Kim et al., 2015). ...
... The departments of public relations, customer service (Hunt, 2015), marketing (Malbon, 2013;Hunt, 2015;Chakraborty, 2019), and general managers (Ahmad and Sun, 2018) are responsible for online fake reviews in one way or another. Moreover, hotel/travel agency managers and their staff are often participants in dealing with fake reviews (Filieri, 2016;Hajek and Sahut, 2022). ...
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Identity disclosure and fake reviews play a vital role in purchase intention and avoidance intention. The current study aims to investigate the effect of identity disclosure on fake reviews and to examine the mediation effects of positive and negative fake reviews on purchase intention and avoidance intention. A quantitative method was employed, using a survey to collect data from a random sample of relevant managers in Egyptian hotels and travel agencies. Using structural equation modeling (PLS-SEM) via WarpPLS software version 7.0 and SPSS version 22 for data analysis, the results revealed that identity disclosure has negatively affected fake reviews. In addition, positive fake reviews have positively affected purchase intention, while negative fake reviews have positively affected avoidance intention. These findings have empirical implications for policymakers, trip planners, travel marketers, hoteliers, and academics.
... fidgeting, a lack of eye contact) (Baker and Kim, 2019;Yoo and Gretzel, 2009), prior research has focused on identifying determinant factors that would make review fraud more likely (e.g. Luca and Zervas, 2016;Malbon, 2013) as well as factors that detect fake reviews based on linguistic styles using manual identification and human coding (e.g. Li et al., 2020;Plotkina et al., 2020). ...
... Linguistic attributes as determinants for fake reviews. Extant studies have focused on identifying the determinant factors of review fraud (Luca and Zervas, 2016;Malbon, 2013) and detecting fake reviews based on linguistic styles Li et al., 2020;Plotkina et al., 2020;Shan et al., 2021). The reason that linguistic analysis can be used to detect fake reviews is that different linguistic styles are likely to be used when telling the truth versus a lie (Pennebaker et al., 2003), and these differences in linguistic styles can significantly influence the understanding and evaluation of online reviews (Toma and Hancock, 2012;Van Laer et al., 2019). ...
This study provides an applicable methodological procedure applying Artificial Intelligence (AI)-based supervised Machine Learning (ML) algorithms in detecting fake reviews of online review platforms and identifies the best ML algorithm as well as the most critical fake review determinants for a given restaurant review dataset. Our empirical findings from analyzing 16 determinants (review-related, reviewer-related, and linguistic attributes) measured from over 43,000 online restaurant reviews reveal that among the seven ML algorithms, the random forest algorithm outperforms the other algorithms and, among the 16 review attributes, time distance is found to be the most important, followed by two linguistic (affective and cognitive cues) and two review-related attributes (review depth and structure). The present study contributes to the literature on fake online review detection, especially in the hospitality field and the body of knowledge on supervised ML algorithms.
Purpose This study aims to formulate a new framework for identifying deception in consumer reviews through the lens of interpersonal deception theory (IDT) and the persuasion knowledge model (PKM). It evaluates variables contributing to consumer intentions to purchase after reading deceptive reviews and proposes deception identification cues to be incorporated into the interpersonal communication theoretical framework. Design/methodology/approach The first study is qualitative and quantitative, based on sentiment and lexical analysis of 1,000 consumer reviews. The second study uses the US national consumer survey with a partial least squares partial least squares-structural equation modeling and a process-based mediation–moderation analysis. Findings This study shows deceptive characteristics that cannot be dissimulated by reviewing consumers that represent review legitimacy based on review valence, authenticity, formalism and analytical writing. The results also support the central role of consumer suspicion of an ulterior motive, with a direct and mediation effect regarding consumer emotions and intentions, including brand trust and purchase intentions. Research limitations/implications This paper presents a new framework for identifying deception in consumer reviews based on IDT and PKM, adding new theoretical elements that help adapt these theories to written digital communication specificities. This study clarifies the role of suspicion in a deceptive communication context and shows the variables contributing to consumers’ purchase intention after reading deceptive reviews. The results also emphasize the benefits of lexical analysis in identifying deceptive characteristics of reviews. Practical implications Companies can consider the vulnerability of certain generations based on lower levels of suspicions and different linguistic cues to detect deception in reviews. Long-term, marketers can also implement deception identification practices as potential new business models and opportunities. Social implications Policymakers and regulators need to consider critical deception cues and the differences in suspicion levels among segments of consumers in the formulation of preventative and deception management measures. Originality/value This study contributes to the literature by formulating a new framework for identifying deception in consumer reviews, adapted to the characteristics of written digital communication. This study emphasizes deception cues in electronic word-of-mouth and provides additional opportunities for theorizing deception in electronic communication.
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With the increasing possibility to spread negative rumors online, online sellers find ways to control user comments on social media. Based on warranting theory, this study examined whether a user’s claim of a seller’s comment-deletion behavior affected observers’ perceptions of a seller’s information dissemination control (IDC) over user comments. It also tested how such IDC perception affected two mediators—seller liking and comment trust—which would influence product evaluation and purchase intention. A 3 (negative rumor vs. deletion claim vs. neutral comment) × 2 (individual vs. company seller) experiment demonstrated that a deletion claim increased IDC perception compared to a neutral comment and a negative rumor. IDC control perception negatively influenced product evaluation and purchase intention more through lowered seller liking than through lowered comment trust. Results supported the warranting principle and emphasized the explanatory role of affective judgments toward sellers for the effects of IDC perception.
The tag antenna exhibiting operation in European and North American regions covering major UHF RFID bands resonating at 866 MHz and 915 MHz, respectively, has been designed in this paper. The tag antenna operating in single UHF RFID region is converted to operate in dual UHF RFID region band tag antenna by modifying its geometry and optimizing the final geometry to obtain resonance at the required resonant frequencies. The tag antenna proposed in this paper comprises a meandered line element with extended lower stub to obtain additional band at European Region. The designed tag employs Alien Higgs-4 RFID chip having capacitive reactance. The designed tag utilizes inductive spiral loop to obtain conjugate impedance to match the capacitive RFID IC. Further, the designed modified tag antenna is simulated and its performance is analyzed based on different parameters such as its resistance, reactance, radiation efficiency, realized gain, etc. Also, it has been seen that the designed dual band antenna shows bidirectional and omnidirectional radiation pattern in E-plane and H-plane, respectively
In the present scenario, a person wants ease in their lives, so E-commerce has become a great and admirable involvement in providing the availability of any product at the doorsteps. But how a person can know the efficiency and originality of the product just by looking at the pictures and the details of the product on the websites. To overcome these issues the E-commerce websites have introduced the concept of the Reviews. Reviews are written by the customers who have already purchased it. Studies show that Product reviews are one of the most important points one considers during the purchasing from E-commerce websites like Flipkart, Snapdeal, Amazon and so on. This paper proposes a model that detects whether the given review is positive, negative, or neutral using the method of sentiment analysis. And using Data Analysis we can find the extension of this paper, we are planning to use a type of sentiment analysis, Opinion Mining which is the research field that predominantly makes automatic systems that will find opinion from the text written in human language. Using opinion mining, we can find whether the given reviews are fake or not. In this paper we have used Amazon food reviews data and based on the rating given by the user we are classifying reviews as positive, negative, or neutral. For positive review ratings given were 4 and 5. For negative review ratings given were 1 and 2. For neutral, rating given was 3. Based on these ratings, we are performing sentiment analysis using Scikit Learn and finding the accuracies of various classification algorithms. We are using Jupyter Notebook for visualization of documents and live coding. Keywords: Data analysis, classification algorithms, data visualization, machine learning
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Lower search costs are one of the major benefits of on-line shopping. In the past, when search costs were relatively high, consumers relied on extrinsic cues like brand and price. The lowering of search costs with the advent of the Internet has changed the way consumers use external cues. In addition, the emergence of the on-line "infomediary" has spawned complex interactions among infomediary reputation, manufacturer brand, and retailer brand. This paper shows the main effects of these factors and explores two-way interaction effects. It demonstrates that a well-known on-line retailer brand increases purchase intention for a weak manufacturer brand more than for a strong one, and by contrast, that a reputable infomediary increases purchase intention for a strong manufacturer brand more than for a weak one.
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This research explores teenagers’ knowledge representation of six digital technologies – email, IM, internet, digital photos, sms and games. Instead of pre-imposing a specific structure, teens freely express everything they consider relevant by identifying the meanings associated with each digital technology. Drawing on cognitive psychology theories and teenagers’ social development theories, the data from thirteen focus groups were analyzed. The nature of attributes comprising technical features, personal and socially relevant activities/experiences, feelings and attitudes towards these instruments only partially matched other IT conceptualizations. However, those studies applied different methodological approaches. Among the 133 attributes suggested, 30 were shared by at least two digital technologies. The Multiple Correspondence Analysis showed that games were psychologically and functionally (physical attributes) more integrated with IM and internet whereas digital photos were segregated. The communicational and product design implications of assessing attributes are discussed.
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It has been said that the Stone Age did not end because humans ran out of stones. In- stead, Stone Age technology was superseded by new tools and capabilities. At some point in history, it simply became more advantageous to adopt new methods and tools rather than trying to solve problems inherent in older methods. Society may soon be at this in- flection point in terms of how people, and particularly youth, identify credible information, abandoning traditional methods of determining credibility that are based on authority and hierarchy for digital tools and new network approaches. Far from being a negative devel- opment, new methods and tools for determining credibility may reflect a more distributed and open approach than in the past. Such an approach has important implications for how youth are educated, how policy is determined, and how future information systems are built. This chapter first highlights some reasons why youth, the institutions that serve them, and society as a whole are moving online, as well as some of the consequences of this move— namely, the paradox of "information self-sufficiency." A reformulated vision of credibility is offered in this context, which highlights features of digital information and networks. Then, a shift among credibility tools and techniques from traditional authority models to more of a "reliability approach" is discussed. Based on this, a framework for understanding the implications of information self-sufficiency for learning in a networked digital world is presented. This framework is used to highlight the often invisible effects that technology has upon credibility. Finally, implications of this are explored and current and anticipated developments on the Internet are considered. The chapter concludes by discussing implica- tions of the information self-sufficiency paradox in the context of the education of youth in the current digital media environment.
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Purpose – The objective of this paper is to analyse whether individuals' socioeconomic characteristics – age, gender and income – influence their online shopping behaviour. The individuals analysed are experienced e-shoppers i.e. individuals who often make purchases on the internet. Design/methodology/approach – The technology acceptance model was broadened to include previous use of the internet and perceived self-efficacy. The perceptions and behaviour of e-shoppers are based on their own experiences. The information obtained has been tested using causal and multi-sample analyses. Findings – The results show that socioeconomic variables moderate neither the influence of previous use of the internet nor the perceptions of e-commerce; in short, they do not condition the behaviour of the experienced e-shopper. Practical implications – The results obtained help to determine that once individuals attain the status of experienced e-shoppers their behaviour is similar, independently of their socioeconomic characteristics. The internet has become a marketplace suitable for all ages and incomes and both genders, and thus the prejudices linked to the advisability of selling certain products should be revised. Originality/value – Previous research related to the socioeconomic variables affecting e-commerce has been aimed at forecasting who is likely to make an initial online purchase. In contrast to the majority of existing studies, it is considered that the current development of the online environment should lead to analysis of a new kind of e-shopper (experienced purchaser), whose behaviour differs from that studied at the outset of this research field. The experience acquired with online shopping nullifies the importance of socioeconomic characteristics.
The article proposes a new site of analysis for the study of regulation: regulatory conversations, and a new theoretical approach: discourse analysis. Regulatory conversations, the communicative interactions that occur between all involved in the regulatory ‘space’, are an important part of most regulatory systems. Discourse analysis, the study of the use of language and communication, suggests that such interactions are constitutive of the regulatory process, that they serve important functions, that they can be the basis of co-ordinated action, and that they are important sites of conflict and contestation. The article explores five key contentions of discourse analysis, considering how each may shed light on aspects of regulatory processes. These are, first as to the meaning of language and co-ordination of social practices; second, as to the construction of identities; third, the relationship of language, thought, and knowledge; fourth, the relationship of language and power, and finally, that meaning, thought, knowledge, and power are open to contestation and change.
The Children's Health Awareness Project is presented as a case study of the use of focus groups for gathering sensitive information from children. General focus group techniques are described, as are the benefits and limitations of focus group methodology for social science applications. Recommendations are offeredfor other investigators planning to use this methodology to gather information from children, especially when sensitive topics are to be addressed.
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
People increasingly rely on Internet and web-based information despite evidence that it is potentially inaccurate and biased. Therefore, this study sought to assess people's perceptions of the credibility of various categories of Internet information compared to similar information provided by other media. The 1,041 respondents also were asked about whether they verified Internet information. Overall, respondents reported they considered Internet information to be as credible as that obtained from television, radio, and magazines, but not as credible as newspaper information. Credibility among the types of information sought, such as news and entertainment, varied across media channels. Respondents said they rarely verified web-based information, although this too varied by the type of information sought. Levels of experience and how respondents perceived the credibility of information were related to whether they verified information. This study explores the social relevance of the findings and discusses them in terms of theoretical knowledge of advanced communication technologies.