Fake reviews on Flipkart, Amazon under govt radar

The Department of Consumer Affairs (DoCA) and the Advertising Standards Council of India (ASCI) will be holding a virtual meeting on May 27 to gauge the magnitude of fake reviews on e-commerce platforms, which mislead consumers into buying online services or products.

The discussions will be broadly based on the impact of fake and misleading reviews on consumers and possible measures to prevent such anomaly, the Ministry of Consumer Affairs, Food & Public Distribution says in a statement.

Department of Consumer Affairs Secretary Rohit Kumar Singh has written a letter to all stakeholders including e-commerce firms like Flipkart, Amazon, Tata, and Reliance Retail among others to take part in the meeting.

The department has also invited consumer forums, lawyers, FICCI (Federation of Indian Chambers of Commerce & Industry), CII (Confederation of Indian Industry), and consumer rights activists to participate in Friday's meeting.

"It is relevant to mention that with growing internet and smartphone use, consumers are increasingly shopping online to purchase goods and services. Given that e-commerce involves a virtual shopping experience without any opportunity to physically view or examine the product, consumers heavily rely on reviews posted on e-commerce platforms to see the opinion and experience of user who have already purchased the goods or service. As a result, due to fake and misleading reviews, the right to be informed, which is a consumer right under the Consumer Protection Act, 2019 is violated," the letter states.

"Since the issue impacts people shopping online on a daily basis and has a significant impact on their rights as a consumer, it is important that it is examined with greater scrutiny and detail," it adds.

Along with the letter, Singh has also shared a press release of European Commission dated January 20, 2022, highlighting results of an E.U.-wide screening on online consumer reviews across 223 major websites. The screening result underlines that at least 55% of the websites violate the unfair commercial Practices Directive of the E.U., which requires truthful information to be presented to consumers to make an informed choice. Further, in 144 out of the 223 websites checked, the authorities could not confirm that traders were doing enough to ensure that reviews were authentic, i.e., if they were posted by consumers who had actually used the product or service that was reviewed.

While Walmart-owned Flipkart continues to corner a bigger revenue share of the country's overall ecommerce pie, its arch rival Amazon India is catching up. The combined operating revenue of Flipkart's two main units - Flipkart India and Flipkart Internet - grew 25% and 32.5% year-on-year, respectively, to ₹50,781 crore in FY21. Meanwhile, Amazon India's two key entities – Amazon Seller Services and Amazon Wholesale (India) -- reported combined operating revenue of ₹19,331 crore in the fiscal.