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London
CNN Business
—
British regulators
are investigating whether Amazon and Google have broken consumer protection law by not doing enough to protect shoppers from fake product reviews.
The probe is the latest in a
string of investigations
piling up against tech giants around the world, as
officials and policymakers
scrutinize claims of
anti-competitive
behavior. The investigations could result in
hefty fines
and increase pressure on companies including Facebook
(FB)
and Apple
(AAPL)
to change the way they do business.
A pedestrian walks past a building at the Google campus in Mountain View, California, U.S., on Wednesday, Dec. 16, 2020. On Wednesday, Texas Attorney General Ken Paxton filed an antitrust lawsuit against Alphabet Inc.'s Google. At its center is a bold claim: Google colluded with archrival Facebook Inc. in an illegal deal to manipulate auctions for online advertising, an industry the two companies dominate. Photographer: David Paul Morris/Bloomberg via Getty Images
David Paul Morris/Bloomberg/Getty Images
Related article
Global efforts to regulate companies like Amazon and Google are gaining steam
The UK Competition and Markets Authority (CMA)
said Friday
that its
formal inquiry, which builds on a preliminary probe launched last May, could force Amazon
(AMZN)
and Google
(GOOGL)
to change the way they deal with fake reviews or result in court action.
“Our worry is that millions of online shoppers could be misled by reading fake reviews and then spending their money based on those recommendations,” CMA chief executive Andrea Coscelli said in a statement.
“Equally, it’s simply not fair if some businesses can fake 5-star reviews to give their products or services the most prominence, while law-abiding businesses lose out,” Coscelli added.
An investigation earlier this year by UK consumer group
Which?
discovered a thriving industry of businesses making money by manipulating reviews on Amazon’s marketplace. One company had 62,000 reviewers globally — including 20,000 based in the United Kingdom — and would sell individual reviews for £13 ($18) or in bulk packages starting at £620 ($863) for 50 reviews.
Amazon and Google said that they would cooperate with the CMA inquiry.
An Amazon spokesperson said the company devotes “significant resources to preventing fake or incentivized reviews from appearing in our store.” The company says it prevented 200 million suspected fake reviews last year being seen by customers around the world and earlier this month filed a lawsuit against the owners of two websites mentioned in the Which? investigation.
The U.S. Capitol in Washington, D.C., U.S., on Tuesday, June 22, 2021. The bipartisan group of senators trying come up with an infrastructure compromise say they are moving closer to agreement on a proposal but are still wrangling with how to pay for their plan in the face of White House opposition to indexing the gasoline tax to inflation. Photographer: Stefani Reynolds/Bloomberg via Getty Images
Stefani Reynolds/Bloomberg/Getty Images
Related article
House antitrust bills could change the internet as we know it. Here's how
“Our strict policies clearly state reviews must be based on real experiences, and when we find policy violations, we take action — from removing abusive content to disabling user accounts,” a Google spokesperson said.
European regulators are
ratcheting up pressure
on Silicon Valley’s titans, announcing several different probes into their business practices just this month.
On Tuesday, the European Union
launched an antitrust investigation
into Google’s vast advertising business just weeks after it unveiled a similar
probe into whether Facebook’s use of data gives it an unfair advantage in online advertising.
The CMA has launched a separate investigation into Facebook looking at the same issue and last week said it is investigating Apple and Google’s dominance in mobile operating systems, app stores and web browsers.
Also this week, a House of Representatives committee moved forward
sweeping bills
meant to rein in firms such as Google and Facebook.
Amazon and Google are being investigated for failing to remove fake product reviews | CNN Business