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Competition Bureau issues warning to employers about staff who post online reviews

The Competition Bureau is warning businesses to watch out for reviews posted by their employees that don’t properly disclose their business connection, pointing out they could be liable under the Competition Act — even if they’re providing an honest opinion.

And that holds true when posting about competitors as well, it said.

“When posting online reviews about their company or its competitors, employees must disclose all connections they have with the business, product or service they promote, even if they’re providing their honest opinion,” the agency said in a press release. “These connections have the potential to affect how consumers evaluate the reviewer’s independence. This applies to all types of reviews, including testimonials on social media.”

It said reviews must be “transparent and truthful” to allow consumers to make informed shopping choices.

“Online reviews often strike at the heart of a consumer’s buying decision,” said Matthew Boswell, Commissioner of Competition. “Shoppers trust that reviews are from real unbiased customers, just like them. When employees post reviews without disclosing their relationship with the business, consumers are misled. We will not hesitate to vigorously pursue enforcement action against problematic reviews.”

To stay on the right side of the law, the Bureau recommends that businesses:

• Train employees to properly disclose their business connection when posting reviews about the company or its competitors. If it’s impossible to make their business connection clearly visible within their review, they should avoid posting it. For example, employees should not assign star ratings to products or services if the disclosure of the employment relationship is either impossible or separated from the overall rating.
• Put in place a compliance program to prevent misleading  reviews by employees and build an effective monitoring system to detect misconduct.

Fines and penalties under the Competition Act vary, but include a maximum of $750,000 for individuals ($1 million for each subsequent violation) for deceptive marketing practices and three times the value of the benefit derived from the conduct if that amount can be reasonably determined.

For corporations, the maximum penalty is $10 million ($15 million for each subsequent violation) and three times the value of the benefit obtained from the deceptive conduct. If that amount cannot be reasonably determined, the maximum penalty will be 3% of annual worldwide gross revenues.