Review needed
Govt should address consumer complaints, not monitor product reviews
The Bureau of Indian Standards has released a framework for moderating reviews on e-commerce platforms. The “Indian Standard (IS) 19000:2022 Online Consumer Reviews — Principles and Requirements for their Collection, Moderation and Publication” will come into force on November 25. Compliance will be voluntary in the initial stages. However, the standards will eventually be mandatory with penalties imposed on e-commerce platforms for unfair trade practices or violating consumer rights. Any platform that allows for public reviews will be liable under the new framework once this becomes mandatory. This is in response to complaints made to the Department of Consumer Affairs.
This is a nanny-state approach. It will be difficult to enforce and it involves the government machinery moderating an activity that should ideally be left to the market. It imposes costs on platforms, which will have to create processes for verifying reviewers’ identities and checking the veracity of reviews. Alternatively, they will cease to offer users the option of reviewing products and services to avoid liability. If reviews are shut down, both customers and platforms will lose a valuable channel for feedback.
Most e-commerce platforms operating in India are marketplaces offering an array of brands of various companies, and these are sold and orders serviced via different retail channels. This model is easiest to deploy, given the complex regulations governing foreign direct investment in e-commerce. Indeed, the attempt to create an Open Network for Digital Commerce (ONDC) encourages this model.
It is sensible under any system of retail commerce to encourage customer and user reviews of products and of quality of service. Such reviews give valuable feedback to potential consumers by offering them information required to choose between competing products, and between competing fulfilment channels. This also allows platforms to tweak processes. In some segments, such as e-commerce aggregators delivering food or groceries, or enabling the booking of homestays, the business model heavily relies on user reviews.
Review systems can be gamed, and it is undoubtedly true that this does occur. A retail channel or product manufacturer can add fake reviews praising the channel, or product, to influence consumers favourably. Equally, a rival channel can put out fake reviews criticising a product or channel to generate a negative impression. Many e-marketing concerns offer service to generate positive reviews, alongside giving search engine optimisation and similar services.
Global platforms such as Amazon or Alibaba have contended with gamed or fake reviews for over two decades. So have India-specific e-commerce platforms such as Flipkart for the best part of 15 years. Market forces eventually help sort out the fake from the genuine on these platforms. On balance, allowing many reviews and concomitantly improving the ability to weed out the fakes are more useful than trying to over-regulate reviews.
It is possible, if expensive, for an e-commerce platform to verify the identity of reviewers by demanding mobile numbers, email ids, or invoices of transactions, even if this requires collecting disproportionate amounts of personal data. However, it is not really possible for a platform to judge if a reviewer is honest. The old principle of “buyer beware” should apply in such cases. Finally, there are many laws protecting consumer rights and guarding people against false advertising. Consumers can seek redress under these laws and in consumer court. The regulatory focus should be on ensuring fast responses to complaints.