Online Reviews: Litigating to protect reputation
A faulty hotel air con unit has exposed a surprising use of NDAs in the battle to manipulate online reputation.
In the early hours of the morning I was awoken by a dripping noise. Creeping around the hotel room I found the air conditioning unit releasing a steady stream of water into my children’s suitcase. The following morning we were due to catch an early flight home so I had packed almost everything, with their now saturated travel clothes on the top. When I asked the hotel if they would help me dry the wet clothes, they said they would – at usual cost – but on condition that I “sign for them”. When they put the piece of paper in front of me, it turned out to be a non-disclosure agreement (NDA) to prevent me from posting a poor review of them online. I refused to sign it and they withdrew their offer to dry the clothes.
When we came to check out later that day, they once again produced the NDA as a pre-condition to being able to check out. Again, we refused, and they tried to withhold the transfer service to the airport. Let’s just say, reader - we got the transfer. But the scale of endeavour bothered me; to go to such lengths to stop me from posting a bad review. Their fear of public criticism incapacitated them and compounded what was in fact an honest, forgivable air conditioning malfunction.
We remember that Hollywood mogul Harvey Weinstein used lengthy NDAs attached to hefty monetary settlements to prevent accusers from coming forward with reports of his alleged serial sexual predation. In the aftermath of his prosecution, NDAs fell firmly out of favour; their very existence creating a supposition of power imbalance or cover-up.
Having an NDA thrust in front of me to prevent me from discussing my children’s soggy clothes is of course not in the same orbit, but led me to consider the financial consequence on companies of the reviews market, its manipulation and long-lasting reputational consequences.
How a company is positioned with its customer reviews is of enormous value to the business. We know that companies such as Xealme create fake reviews on social media platforms and offer its services in nearly every country in the world. Business is booming and this broker alone claims to have created nearly 16,000 reviews for a total of 570 customers.
Reviews are added quickly and boost a company within days, and it is not easy to spot which they are. In some instances there has been speculation that brokers will not only create fake positive reviews for a client but will also create fake negative reviews for its competition. These fake negative reviews may cause a competitor tangible financial loss, operational disruption and compromise a hard-earned reputation.
The government plans to specifically ban the sale of fake reviews, advertising fake reviews and hosting consumer reviews without checking they are genuine. It also plans to give the Competition and Markets Authority greater powers. The CMA will be able to directly fine companies that act badly 10% of their global annual turnover rather than having to go through lengthy court proceedings; a move that aims to make it easier to practically tackle and disincentivise fake reviews.
Fake reviews are particularly proliferant and problematic on Facebook, Google and Trustpilot and these giants should be more proactive in protecting their users from the impact of fake reviews before these proposals come into effect (not before 2024). Any company suffering the impact of fake negative reviews should not hesitate to hold social media platforms to account.
Amazon has already succeeded in winning a series of US legal actions against fake review brokers this year. It was held that AppSally and Rebatest violated Washington state’s consumer protection law by deceiving customers, and were prohibited from selling Amazon reviews in the future as well as ordered to pay unspecified damages. Explaining why this litigation was so critical for Amazon in defending its reputation, they said “Defendants are actively deceiving Amazon’s customers and tarnishing Amazon’s brand for their own profit as well as the profit of bad actors selling in Amazon’s store”.
Legislation lags firmly behind in this – and many other – arenas. Companies suffering the slings and arrows of false negative reviews can get ahead of the intended 2024 legislation by taking the initiative to expose fake review brokers themselves.