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Competition watchdog warns Woolovers about online reviews

Woolovers has admitted to wrongfully supressing unfavourable reviews on its website.

The Competition and Markets Authority (CMA) has secured undertakings from the knitwear retailer to ensure it will "publish all genuine, relevant and lawful customer reviews on its website" or risk going to court and potentially being fined for a breach of consumer law.

The CMA's investigation found that between December 2014 and November 2015, Woolovers chose to publish more favourable customer reviews on its website. According to the competition watchdog, Woolovers staff were told to approve a selection of positive reviews – none below four stars – which resulted in almost half of customer reviews not being published online.

Nisha Arora, CMA senior director for consumer enforcement, said: "It is important that, when consumers read reviews on a company’s website, they are given the complete picture. Critical reviews must be published as well as those that praise the company’s products and services."

The CMA began investigating online reviews last summer, after it learnt nearly 40% of retailers who offer a system to review products do so through an in-house embedded system which are not independently verified, making it easier to leave fake reviews.

Arora added: "Since we published our call for information on online reviews and endorsements in June 2015, the CMA has secured changes from 15 companies and individuals and published wider compliance advice. Online reviews and opinions are an increasingly useful source of information for people in making their buying choices – and so are an important element of effective competition in the market – and businesses must comply with consumer law so that consumers can trust the opinions they read online."

The CMA said Woolovers had engaged constructively during the investigation and noted the retailer underwent a change of ownership in July 2015.

Neil Sansom, chief executive of Woolovers, commented: "The new Woolovers management team had in place a plan to change our customer review process prior to the CMA investigation to ensure it conformed to industry best practice. As such, we have provided the CMA with as much historical information as we have from the past ownership, and worked with the CMA to understand any other issues we had not already identified in our customer review process."

Sansom said the retailer has since implemented a new web platform and partnered with a third-party review system, called Feefo, which only allows customers who have purchased products to leave reviews. "All such new reviews will be published in future for public transparency, with no editing or falsification, save for those reviews that are deemed inappropriate, offensive, or that contain swear words," he said, noting how the customer reviews pre-dating the new website are no longer visible.

"This robust and independent process will ensure our reviews are both honest and open going forwards," said Sansom. 

Social influencers

The CMA also secured undertakings from social media marketing company, Social Chain, which admitted to undisclosed advertising on Twitter, YouTube and Instagram.

The agency used social media accounts and organised popular social media personalities, with a combined reach of around 4 million followers, to promote films, games, takeaway restaurants and dating apps. But it was not made clear to consumers on social media that the content was paid-for advertising.

Social Chain admitted the posts "may have been difficult for readers to distinguish from other posts, conversations and jokes they appeared alongside". The company has promised to ensure all posts will be clearly labelled as advertising going forward.

The CMA has also written to 15 businesses, who were working with Social Chain, and the 43 social media personalities to warm them about the breach in consumer protection law.

"Social media personalities can have an important influence on people’s views, especially young people," added Arora. "It is therefore crucial that when people decide what to buy, they should not be misled by adverts on social media that read like independent opinions. Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such."