Out-Law Analysis | 21 Jun 2011 | 3:47 pm | 3 min. read
The practice is called astroturfing, because it fakes grass-roots support, and it is not only ethically questionable, it is illegal. And if the law doesn't damage the business of those who engage in it, the verdict of the public will.
The laws surrounding the practice are yet to be fully tested, and business owners might think they can get away with some of the activity uncovered by The Times's investigation. But business owners must realise that, law or no law, faking support could cost them their most valuable asset: their reputation.
Individuals and companies have been saying nice things about themselves online since the first web forum opened its virtual doors, but that process has now become professionalised, and positive reviews have become tradeable commodities.
In an investigation earlier this month The Times found that hotel owners in the UK were paying up to £10,000 to agencies that said they could improve travel review rankings and, in some cases, could discredit rival businesses.
Agencies 'sold' followers on social media sites for 24p each, the paper found. They used multiple accounts and hired writers who could use different writing styles to fake a groundswell of support for a business and its services.
Consumer service industries have the most to gain from word-of-mouth recommendations. Hospitality businesses, in particular, depend heavily on what people say about them. But this means they have most to lose.
Some proprietors may not be aware that astroturfing is illegal, but it is. The Consumer Protection from Unfair Trading Regulations say that pretending to be a consumer and giving yourself a positive review is 'an unfair commercial practice'. This is a criminal offence and proprietors are potentially liable for an unlimited fine and a prison sentence of two years.
The practice is also contrary to the UK Code of non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code). Astroturfing breaches the CAP Code as the marketing is not fair, legal, decent, honest and truthful - the key principles of the self-regulatory CAP Code.
It may be that some businesses know this, but will be taking the calculated risk that they will not be caught, or will escape prosecution. This, sadly, is a better bet than it might seem.
It is a quirk of the Unfair Trading Regulations that the only bodies which can take action based on them are the Office of Fair Trading (OFT) and Trading Standards.
It is unlikely that they will spend public money on investigating one-off cases of astroturfing, and even less likely that they will prosecute.
Equally, an unscrupulous business owner is unlikely to harbour great fears of the ASA. By far its most frequent response to breaches of the CAP Code is to tell the organisation to remove the offending advert or not use the infringing marketing communication in the same form again.
The real reason that businesses should avoid astroturfing is not legal at all: it should be the fear of being exposed.
Consumer businesses trade on their reputation more than anything else. Hospitality businesses – big users of astroturfing if The Times investigation is to be believed - live or die on their good name.
If one of these companies is found to have faked consumer support, it could be fatal to their prospects.
Why? Because it demonstrates a lack of confidence in their own products and services. And because it breaches the fundamental trust that must exist between consumers and the companies that sell to them.
Businesses must have more faith in their own services. If they don't, they should be spending that £10,000 improving their services, not creating a false impression of them.
For a start, this is because being exposed as a company that relies on cheating review websites looks terrible. And it can't last. What happens when the astroturfing budget runs out? Real reviews take over again, more virulent than before because the reality has so poorly matched the dream they were sold.
Advertising by its nature has always walked a fine line between truthful boasting and deception, and social media platforms give companies a new way to reach people direct with their messages. But care must be taken, here as with other media, to stay on the right side of the law and, more importantly, on the right side of customers.
Breaking consumer laws looks bad. Deceiving your customers looks worse. To do both could spell the end of your business.
Claire McCracken is a technology law specialist with Pinsent Masons, the law firm behind OUT-LAW.COM.