Online reviews have become increasingly relevant to online, and increasingly also brick-and-mortar businesses in the past decade. Initially they came about as a way to get a feel for the quality of a product or service online, where customers couldn’t interact directly with products or businesses. Over time, their popularity has increased, and 4 out of 5 online consumers now consult online reviews before making a purchase. As a result, online review sites have emerged as a battleground.

shutterstock 440184667 300x200 - SMEs need protections against review blackmail

Small businesses, especially startups, often rely on their online reputation to maintain their bottom line. As a result, negative reviews, or harsh blog takedowns by industry influencers can have devastating consequences. In some cases, a single, particularly offensive review could destroy a business. To help manage this threat, many businesses began engaging in producing fake reviews for themselves to boost their ratings. Seeing this, customers and competitors alike soon realised that they, too, could game the system.

In recent years, reviews have become a popular medium for blackmail. Bloggers and consumers produce false damaging claims, and demand compensation, discounts, rebates, or other benefits to retract and take them down. Businesses, for their part, often comply with these demands, knowing that defending themselves is as hopeless as it is prohibitively expensive.

SMEs have no real defense against blackmail

In Australia, only individuals and businesses with fewer than 10 employees are able to take legal defamation action in cases like this. Those who have the option to do so often don’t, because the legal cost of doing so is often much more expensive than simply paying off the offending party. As a result, a stunning 43 per cent of retailers, and 35 percent of surveyed service businesses complied to eliminate the threat to their business.

As is typical with cyber crimes of all types, there are practically no existing protections for businesses. Moreover, legal protections that do exist are primarily designed to protect offenders, not small business victims. A business that chooses to sue a blackmailer is likely to lose under a protection that allows customers to express “honest opinions” about matters of public interest. Proving that a review is not an honest opinion is, of course, nearly impossible, and the public interest encompasses most of any business’ affairs. Further, it’s not illegal for a “wronged” customer to ask a business to rectify that perceived wrongdoing, and to remove their harsh review of them in return.

Businesses currently rely on review websites for protection

With little to no legal protection, businesses are forced to rely on review websites themselves to protect them. While some, like Yelp and Facebook, allow businesses to report defamatory reviews and make some limited effort to remove them, others have taken a less reputable tack, offering to remove bad reviews for a large fee. This has even led to claims by some businesses that those review sites generate bad reviews in order to boost their incomes.

Those who do try to fairly manage and take down some bad reviews are accused of doing so falsely, effectively choosing winners and losers among businesses. Regardless, businesses are forced to engage in extensive reputation management to protect themselves, particularly those in vulnerable industries like hospitality and retail. By directly engaging popular reviews sites, they can appeal for support in combating malicious reviewers.

Unfortunately, this is still an imperfect solution, requiring a significant investment of time and resources for only limited protection. In addition to this, many businesses engage in creating fake reviews to boost their online ratings to compensate for current or anticipated bad reviews. While this might work in the short term, it further undermines the efficacy and purpose of online review systems as a whole. All of this goes to show that the overall state of online reviews is abysmal and extremely overdue for improvement.

Starting a conversation

A silver lining to the issue of both blackmailers and businesses attempting to game review sites for their own purposes is a growing public awareness of the problem. While a large majority of online shoppers do rely on reviews to make purchases, they are increasingly aware that many of these are untrustworthy. All parties involved, including reviews sites, customers, and businesses, are seen as part of the problem to some extent.

What is undeniable is that the price for all of this confusion is paid first and foremost by businesses. False negative reviews can have devastating consequences for newer businesses that are just establishing their reputations, and it’s unacceptable to expect SMEs to simply submit to blackmail. To protect their small businesses and their consumers, governments need to work harder to understand this issue, and to work with businesses, review sites, and consumers to keep people honest, and to hold criminals accountable.

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