Govt Introduces New Regulation To Combat Fake Reviews On Ecommerce Platforms

In a bid to address the growing concern of fake customer reviews and inflated ratings on ecommerce platforms, the Union government is set to implement an Indian Standards code. This move comes in response to an uptick in complaints from online shoppers on the national consumer helpline, revealed consumer affairs secretary Nidhi Khare.

Customer reviews and ratings play a pivotal role in influencing purchasing decisions on online platforms. However, sellers often resort to manipulative tactics, including paid reviews, to bolster their ratings and sales figures.

Khare, who chaired a stakeholders’ meeting with representatives from major ecommerce platforms like Amazon and Flipkart, emphasised the detrimental impact of fake reviews on the credibility and trustworthiness of shopping platforms.

India's ecommerce market, estimated at USD 112.93 billion in 2024, is projected to reach USD 299.01 billion by 2029, growing at a compound annual rate of 21.5 per cent, according to a report by Mordor Intelligence.

The newly introduced standard (IS 19000:2022) outlines specific responsibilities for both reviewers and review administrators, requiring organisations to verify the identity of review authors through prescribed modes.

Official data reveals a significant surge in consumer grievances related to ecommerce, from 95,270 in 2018 to 4,44,034 in 2023. As per Khare, ecommerce platforms operating in India will be mandated to develop a written code of practice and ensure its implementation among management and staff.

While platforms like Amazon have acknowledged the issue, the prevalence of fake reviews persists. According to a study by US-based consulting firm Pattern, a mere one-star increase in an Amazon rating correlates with a 26 per cent surge in sales.

In the Indian context, fake reviews predominantly affect customers in segments such as hospitality, travel, and food and beverages, as highlighted by the consumer affairs ministry.

Draft quality control orders related to the new standard emphasise the necessity of ensuring that genuine reviews are published through robust processes for collection, moderation, and publication.