Small businesses depend heavily on trust, customer referrals and word-of-mouth advertising. Reviews are essential in this context, as they assist prospective customers in determining whether a company is trustworthy. Nevertheless, the rise of fake reviews has hindered the ability of small businesses to compete on a level playing field.
On 6 April 2025, the Digital Markets, Competition and Consumers Act 2024 (DMCCA) came into effect, introducing many important changes to address the issue of fake and misleading business reviews. These changes affect businesses that provide goods and services to consumers. The main amendments include a ban on fake reviews and ‘drip pricing,’ where an initial product price is presented, but additional fees are subsequently added.
This month, we examine the key sections of the new legislation and their practical implications for businesses.
Why The Change Was Needed
Research suggests that approximately £23 billion of consumer expenditure in the UK is potentially swayed by online reviews each year. Additionally, the range of businesses establishing an online presence has progressively expanded since the onset of the pandemic.
While the government has acknowledged the positive impact this has had on the economy, it has also recognised the detrimental effects on consumer rights, as individuals often find themselves stuck in unwanted subscription agreements and misled by ostensibly ‘good’ offers.
As a result, the DMCCA was enacted to crack down on unfair commercial practices, with the initial set of changes to consumer protection law taking effect from 6 April 2025. The subsequent set, concerning subscription contracts, is anticipated no earlier than Spring 2026.
Fake Reviews
The new legislation introduces a ban on fake consumer reviews. A ‘fake consumer review’ is a review that ‘purports to be, but is not, based on a person’s genuine experience.’ The new rules’ scope is extensive, covering reviews of products, services and digital content. It will particularly impact e-commerce businesses and online platforms. Reviews may appear in various formats, such as written text, spoken text or visual representations (for instance, a star rating displayed next to a product listed in a search result).
The DMCCA prohibits the following practices:
- Submitting or commissioning someone to create a fake consumer review
- Concealing the fact that a review was paid for or incentivised by any means, including money, discounts, complimentary products or stays
- Presenting consumer reviews in a misleading way
- Communicating review information, such as star ratings or rankings, based on fraudulent or dishonest reviews
- Providing services that assist businesses in doing any of the above.
Furthermore, the legislation places a positive obligation on businesses to take ‘reasonable and proportionate steps’ to prevent and eliminate fake reviews and false or misleading consumer reviews from publication.
What Does My Business Need To Do To Be Compliant?
Businesses that use or publish customer reviews are required to take clear steps to eliminate fake or misleading reviews and promptly remove any prohibited content. Many traders will need to at least adjust their existing practices to avoid selectively showcasing only the most favourable reviews.
Conducting an audit of existing consumer reviews and regularly assessing the risks of fake content is advisable, in addition to staff training. Furthermore, businesses that publish consumer reviews should establish a written policy that explicitly prohibits fake reviews and outlines their stance on incentivised reviews and consumer review information.
Examples of What To Avoid
- Providing an existing customer with a complimentary or discounted product in exchange for a five-star review that does not accurately reflect their true experience
- Reaching out to a customer who has submitted a negative review and offering them a refund or gift card in return for altering their review to eliminate any negative remarks
- Purchasing reviews that appear to be written by individual consumers but are actually generated by automated software (e.g bots)
- Presenting reviews in a deceptive manner, such as failing to disclose, or removing negative consumer reviews, while only showcasing positive ones or omitting pertinent information regarding the context in which a consumer review was written
- Hiding the fact that reviews have been incentivised, which includes situations where a reviewer has a financial interest in the trader or product being reviewed, such as being an employee or shareholder, or has a commercial link with the trader, like being a supplier.
Consequences of Non-Compliance
The Competition and Markets Authority (CMA) will enforce the new rules, and non-compliance may result in penalties, including fines.
Nevertheless, the CMA has indicated that it will prioritise assisting businesses with compliance for the initial three months rather than enforcing penalties whilst the new rules bed in.
Drip-Pricing Also Banned
The legislation also prohibits the practice of ‘drip-pricing,’ where consumers are initially presented with a product price, only to encounter additional mandatory fees as they finalise their purchase.
A report from the Department for Business and Trade indicated that drip-pricing was prevalent and was adopted by more than half of entertainment suppliers and businesses in the hospitality trade.
The new rules require, for instance, in the case of cinema or train tickets, that all mandatory booking fees be disclosed at the outset of the purchasing process. However, optional extra costs, such as those relating to airline seat selections or luggage upgrades, are exempt from the new rules.
We’re Here To Help
If you are unsure about the implications of these changes for your business and the necessary compliance steps, our legal team is available to provide guidance. For further information, contact us on 0330 173 6951 or email us.
