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WASHINGTON, Nov. 9 (TNSrep) -- The Center for Data Innovation issued a 25-page report on September 12, 2022 entitled "How Policymakers Can Thwart the Rise of Fake Reviews."
The report was written by Morgan Stevens and Daniel Castro.
Here are excerpts:
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As businesses compete for customers in the digital economy, some use deceptive tactics to manipulate consumer reviews about their goods or services, or those of their competitors, including by posting fake reviews. These fake reviews can damage honest companies' reputation and deceive consumers into purchasing goods or services of substandard quality. To address this problem, federal and state policymakers should significantly strengthen enforcement actions against the perpetrators of fake reviews, work with the private sector to develop best practices to prevent and detect fake reviews, and enact legislation to protect honest reviewers.
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INTRODUCTION
Online consumer reviews play two important roles. First, reviews can inform consumers about the quality of products and services and the reputation of companies. Second, online reviews give companies information they can use to improve or modify their offerings. By receiving feedback from customers, companies can further develop products to match market trends, rectify any issues with their goods or services, and monitor the quality of their handiwork.
Consumers heavily rely on online reviews when determining whether to purchase a product or service. In 2021, 77 percent of U.S. consumers always or regularly read online reviews when browsing a local business./1
And these reviews matter: Just 3 percent of U.S. consumers would patronize a business with an average of two or fewer stars (out of five)./2
Consumers depend on reviews to inform their purchases, and companies depend on reviews to entice consumers to choose their offerings over a competitor's.
The importance of online reviews has opened a new market for fake reviews that present a dishonest impression of companies, goods, and services. Companies may turn to employees or bad actors to fraudulently leave positive reviews to boost the image of their products, or negative reviews to discredit those of a competitor. These actions both hurt honest businesses and mislead consumers as to the quality of relevant goods and services.
To address this problem, policymakers should take the following steps:
First, the Federal...